Tag Archives: gas

Variable Expenses

I recently posted how to budget for variable income. Now I want to discuss a related subject, variable expenses. Budgeting for variable expenses frustrates people just as much as inconsistent income.

I have noticed since starting zero based budgeting that my fear of variable expenses has dramatically decreased. I attribute most of this anxiety decrease to gradual learning about where I spend my money. Each budget that I go through teaches me a little more about my routine finances and gives an idea where to make adjustments in future budgets.

Free Zero Based Budget - Variable Expenses. Image from Flickr by basykesA few examples of variable expenses:

  • Groceries
  • Medical
  • Gasoline
  • Electricity

There are of course many others, but those listed above apply to a large amount of people.

Groceries are probably the easiest to control. You know exactly how many mouths you have to feed and you typically know how many days you do that for. In my case, it’s 5 mouths and a two-week pay period. What you do not know are the variances in price, what’s on sale, etc.

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Cash for Gas

In 2006, my wife and I started following some of the suggestions of Dave Ramsey. One of which, he recommends using cash to pay for certain expense categories. We were reluctant to start using cash. The idea of it made us uncomfortable at first. What happens in the grocery store if you get through ringing up and you need more? The answer is simple actually. You put something back. Okay, that works.

Zero Based Budget - Cash for Gas from Flickr by taylor.aWhat about gas? I thought gas was a wash no matter how you paid for it. I assumed that you use the same amount of gas whether you pay for it with credit card, debit card or cash. I was wrong.

Let’s look at an example for Gas:

I pull in my truck, press the pay outside with credit button and fill up. I let it run until I hear it stop. The total is $67.84.

What if I pulled up with $60 dollars cash in my pocket? I press the pay inside with cash button. I start pumping and stop on $60 dollars’ worth (actually most of the times I get $60.01!).

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