The Budgeting Trick That Allows Me To Worry Less About My Latte Habit

Budgeting has been my worst enemy, my best friend, and my math tutor that hates how distracted I get during our sessions all at once. It’s never been an easy “one-size-fits-all” solution for me and my money.

Why? Well, mostly because I hate sticking to a budget that will 100% change every single month, and because once I convince myself I hate something — well, that’s basically it. (Unless you’re some sort of food. I’ll eventually eat you regardless of my hatred.)

However, if there is one part of a budget that is more reliable than a radio station playing Drake at least 64 times a day, its my fixed costs.

Every single month, I know I’ll be spending the following:

That means, that I’ll have around $1,700 ($1243.55 USD) leftover to spend on my variable expenses, which normally go something like this:

Therefore, my leftovers for saving would be around $790 ($577.89 USD).

Wow, that was bang on you guys. I think I know my money a little bit too well (said no one ever).

So why do we worry about variable expenses at all?

Unless you are seriously awful with money (which we all are at some point), living outside of your means takes a lot of work. I mean, it’s hard to overspend if you are aware of what you have leftover each month. Unless of course, you don’t.

So, what if I take variable expenses out of my budget altogether? Am I going to lose sight of my spending habits and suddenly spiral out of control financially? Sure, it’s possible.

However, after getting a handle on how much I spend each month, and understanding that what’s leftover will always be roughly what’s leftover, I can choose how much I allow myself to spend. Without a strict budget.

After all, the reason I’m always feeling guilty about how much I spend on silly expenses is because I’ve always given myself limitations. I’ve always told myself I can only spend $150 on dining out. So, that month (*cough* April *cough*) with 13 birthdays in a row, I shouldn’t feel bad if I spend an extra $26 on an overpriced brunch and delicious London Fog.

Maybe in April, my variable expenses look something more like this:

Being in control of my variable expenses is the one thing that makes this seem doable. Because that’s just it.

We are totally in control of our variable expenses, even though they aren’t fixed costs.

We decide how much we spend on groceries, our vehicles, clothing, and beyond. Some of us just have more control than others. “But Alyssa, what about…” Shh, sweet child. I know what you’re thinking: “What about unexpected variable expenses?”

But isn’t that why I save for emergencies anyways?

Focus on the fixed.

Instead of worrying how much I’ve been spending on coffee, sushi, and Twizzlers, I’d rather focus on how much I spend on rent, insurance, and cable. These numbers never increase unless I am given notice, or decide to change them myself.

But these numbers can be decreased if I try my hardest, and ask the right questions. Your fixed expenses can be hard to lower, but the long-term benefits from reducing these amounts can be a lifesaver. And no, I’m not talking about food anymore.

For starters, I always make sure that any additional fixed costs I take on are within my budget, can be trimmed if necessary, and keep my lifestyle sitting pretty. The only Joneses I know now are the frugal bloggers around the internet, and that is a comparison game I’ll be playing for a long time to come.

Alyssa Fischer claims she’s not an expert on personal finance — which is why it’s easy for her to explain financial topics without getting too intense. You can find her on her blog, Mixed Up Money, where she proves money isn’t boring (and that it’s also a little funny). You can also spend all day ranting with her about your finances on Twitter.

Image via Unsplash

  • Michelle Luna

    I don’t understand, a fixed expense is a fixed expense. You can’t ask for lower rent, insurance, or cell phone payments, and you can’t negotiate your utility bills either (sure, you can try to use less, but there’s only so many showers you can skip or candlelit nights you can have in the interest of not using heat or electric to save a few bucks). So I’m not really getting why one should focus more on the fixed expenses rather than the variable. You can easily skip certain social activities considering you HAVE to pay rent, you don’t have to buy drinks at a bar.

    • Hey Michelle! I have actually negotiated on all of the above. Rent, insurance, cell phone, cable, and gotten deductions. As far as why I would focus on fixed: that’s the entire point. You can absolutely skip drinks and social activities, but I don’t want to and don’t need to because my fixed expenses allow me to control my discretionary spend.

      • Anon

        But I still don’t understand how your fixed expenses allow you to control your discretionary spending. I get that negotiating them down gives you more room for discretionary spending but that’s not the same as controlling your discretionary spending. Is the point to just spend less on necessities so you have more money to spend on luxuries? I think I’m just genuinely confused by how the article is written.

  • nicolacash

    I don’t understand the point of this article? I don’t have cable, and I can’t change how much I pay in rent or insurance. You also spend a ridiculous amount in the variable category, whereas if you cut back on just one of the categories (entertainment) then that extra money could go towards Dining out (where your latte habit is.)

    • Anon

      I’m also confused but here’s my best guess. Maybe she means that you can have more discretionary income for little things if you go cheap for the big things. So have a smaller apartment or roommates so you can spend your money on stuff and experiences. As a bonus, if anything goes wrong, you’re in an easier position to retrench, in contrast to someone who is frugal on the discretionary spending but rents a more expensive apartment that s/he couldn’t easily walk away from if laid off. Both the frugal person with the big apartment and the spendy person with the little apartment might be spending the same in a given month but the person with a smaller apartment/fixed expenses is in a much better place to drastically cut down on expenses if something goes wrong.

      I’m not saying that’s right but I think that’s what she means.

      • nicolacash

        That only makes sense if it’s a once a year thing, like when your lease ends and you’re figuring out your next move – but in terms of a month-to-month spending plans when you’re locked into the fixed expenses for the year, this doesn’t work.

        • Anon

          Yup, agreed.

        • Vinoth.G kumar

          What you said is right. Planning is for understanding purpose. Here we can’t understand how it is.

    • Hey girl, totally get what you’re saying! This is just a personal blog post regarding why I care more about fixed expenses than variable. I can completely control how much I spend on my variable expenses, and because I gave myself such low fixed expenses, I have more wiggle room in other areas of my life. It’s really about the opposite of cutting back. I don’t want to have to skip my lattes, and I can afford to dine out regularly because my rent is only $700.

      Also, I ask for a rent deduction every year – sometimes it works, sometimes it doesn’t. This year I was offered one month free instead of a deduction. You can always change how much you pay in rent if you are willing to relocate or just ask the tough questions. Obviously those are harder to change, but if you can, they can be a huge lifesaver. You can always cut back on discretionary spending if you need to, but that’s the whole point in the word “discretionary”. It’s your choice.

  • Leeni

    I think you folks got it all wrong. She leaves herself extra spend money and the extra goes into savings. The variable amount is the difference between her budget for non fixed costs spending and total available funds. Whatever is not used is deposited in savings. Brilliant.

    • Anon

      But isn’t she just inviting lifestyle inflation by having such a huge chunk of her money in her checkings account as “maybe I’ll use it for fun, maybe I won’t”? Isn’t the better idea to just allocate a smaller portion of her income for fun but give up the idea of categories (so if April has a lot of restaurants, don’t go to a concert) and pre-pay a larger set amount to savings? All that seemed to happen when she adopted this method is that she overspent in every single category compared to her budget.

      • Shelly

        I agree with this. If she wants to have more flexibility on how to spend her money allotted for variable expenses it would make more sense to actually allot an amount for spending instead of just hoping there will be something left over. I don’t think you need categories for your variable expenses, but you do need to decide whether your money is for spending or saving. She is very lucky to have so few fixed expenses and plenty of income, but on a tighter budget this would not fly.

        • Hi Shelly, I do allot a good amount for spending, which is what all of my variable expenses are listed as up above! 🙂 I also agree that I am very lucky, but I also chose to only have those fixed expenses in my life. I’ve been on a tighter budget where I had $0 leftover, and that is why I now allow myself to enjoy the occasional latte and dinner with extra cash.

  • Anon

    Ok, here’s the other thing I don’t get. Didn’t her April expenses just tack on an extra $200 in spending compared to her ideal budget by not paying attention to variable spending? Yes, she saved but she could have saved a lot more by attending to optional expenses.

    What is the budgeting trick in this?

    • Court E. Thompson

      I don’t think there is a trick. When more than half your income is discretionary, who needs a budget?