Okay, so we’ve taken a look at the basics and the things that need to go into our normal budget. Now it’s time to look at the things that are a little more negotiable.
This is where the fun things come in.
What Are the Flexible Spending Areas?
Okay, we’re going to look at the spending in areas that are a little less … required. These are things like:
- Personal spending
- Gifts for special occasions
- Subscriptions
We don’t actually have a lot of things in this category because we try to include all of it under the personal spending category. That’s a personal decision that we made in trying to make the budget really work.
Now, you may have noticed that we put internet in the non-negotiables category rather than in flexible spending.
That’s because I work from home and I do all of my work through the internet. I need internet in order to be able to work. So that means it’s a required expense that I can also write off (at least partially).
The other areas, however, are things that we’re working on trying to adjust and trying to reduce.
This last year we didn’t do so good about that variable spending.
We gave ourselves a great deal of personal spending money that we shouldn’t have. Instead of reigning in our spending to make sure that we had enough for everything else, we tended to give ourselves spending money and then make everything else work from there.
We also spent more than we should have on gifts for special occasions.
I love my family.
I love my friends.
And I love to spoil everyone in my life.
That’s great when we have money to buy the things that we want to for everyone. But … this past year we really didn’t.
And going into this year we really don’t either.
So last year we did badly when it came to birthdays and Christmas. We bought more things than we should have for everyone on our lists.
But this year we’re going to change it up.
We’re going to pay better attention to the budget and find different ways to cut how much we spend while still showing our loved ones how much we love them.
We’re going to reduce the budget and start getting a bit more careful about our budget.
We’re going to make sure that we’re on the right track and we don’t blow the budget in the process of buying gifts for everyone.
Taking a Closer Look at Subscriptions
And what about subscriptions?
Well, I used to get a couple subscriptions that I paid for yearly, but this year I decided to cut things down.
One of the subscriptions that I used to get was a specialty box called Alltrue, but it was kind of expensive and usually I only liked about half the items (usually the larger ones but still a lot of money).
This year I decided to cut that subscription.
The one subscription that I decided to keep was my workout program.
I’ve been subscribed to Beachbody (now BODI) for a few years now and last year I started buckling down hard when it comes to my workouts.
This year, I looked at my subscriptions and weighed it out and decided that this one was definitely worth keeping and that I was going to hold onto it.
We also looked at our movie subscriptions. We were subscribed to Disney+ and Netflix with the standard packages, which didn’t include ads. But then the services changed and now those packages are a little more expensive and there are ad options.
What we decided was that we didn’t actually need Netflix. We don’t watch it much and it costs us around $10 a month for us not to watch anything. So we cut it.
We did decide to keep Disney+ and we kept the ad-free version because we tend to watch it more frequently and especially with our little one for our Sunday movie nights. So we paid a little more for that one, but dropped Netflix.
My husband also decided that he was going to keep the gaming subscription that he has because he plays video games most evenings after our little one is in bed, and he’s even started streaming those video games online. So it was worth the cost for him.
Our Final Decision
So, our final decision was:
Video game subscription: Keep
Beachbody/BODI subscription: Keep
Alltrue subscription: Cancel
Netflix Subscription: Cancel
This worked for us, but there are differences for everyone. I’m sure there are plenty of different ways that other people would choose to make those decisions (and maybe ways that you have), so let’s take a look.
Making the Decisions
If you’re looking at your variable expenses it’s important to consider what’s important to you and what’s not.
So, look at each of those variable expenses as an independent charge.
Which ones are important to you? Which ones would make your life a little more difficult or a little less enjoyable if you were to cancel them?
For some people it might be a cleaning service.
For others it might be a meal prep service.
Maybe you pay for delivery services for your groceries.
Maybe you also have a subscription box.
Or maybe you also pay for a gym service either online or in person.
When you’ve made a list of each of your subscriptions or variable expenses take a look and decide which ones are worth the money and which ones are not.
You’ll likely find at least one or more that you can cut or possibly reduce (can you cut your Netflix account to an ad-enabled one instead of a standard account?).
From there, you’ll find a little extra money in your budget.
You may also find other areas in your variable spending list where you can cut a little bit.
Maybe you’ll cut down your gift spending budget like we are planning to this year.
Or maybe you’ll cut down your personal spending like we are this year.
We’ve also decided that most of our ‘extras’ outside of budgeted categories will be coming from our personal spending this year.
That includes our little ones’ fish tank (his main gift for Christmas this year). New fish will come out of the personal spending money.
Basically, for us, anything that doesn’t have another category will go in the personal spending category.
What to Do Next?
So, what’s next? How do you take all of this and create a budget that’s going to work for you?
Now you know the fixed expenses that have to go into your budget.
And you know the variable expenses that have to go into your budget.
So it’s now just about time to actually put these things together, and make sure that your budget is going to work for you and your family.
Because a budget that isn’t realistic … well, you’re just setting yourself up for failure. And trust me, I’ve been there (a lot of times) and it’s no fun.
When you set yourself up for failure by creating a budget that’s way too idealistic and doesn’t account for the realities of your income and spending, you’re not going to be able to meet that budget. And when you can’t meet that budget you’re going to be disappointed, upset, frustrated, and angry with yourself.
And you’re going to be a whole lot more likely to just throw in the towel and give up the whole thing.
So stay tuned and we’ll take a look at how to put things all together.
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