What is a periodic expense – Microsoft 365 (2024)

FAQs

What is considered a periodic expense? ›

Periodic expenses are irregular yet predictable expenses. Unlike fixed expenses, they don't occur on a monthly basis. For example, tuition payments would be a periodic expense. Tuition can be paid quarterly, but isn't paid on a consistent, monthly basis.

Flexible expense is the representation of the spending that is not constant in a company's or individual's budget, and could vary over time. Periodic expense is a type of spending that has a structured way to be paid, namely, a frequency established.

A periodic budget, as the name suggests, involves dividing the annual budget into smaller periods. It is more useful to refer to pay periods since money coming in and out centres around them. To establish a periodic budget, you have to know the available amount of your cash assets when creating the budget.

These are the necessary expenses that remain the same each month, including your rent, car payment, and insurance. You generally need to make big changes in your life to impact these expenses, such as trading in your flashy ride for something more economical or shopping around for a better insurance rate.

In managerial and cost accounting, period costs refer to costs that are not tied to or related to the production of inventory. Examples include selling, general and administrative (SG&A) expenses, marketing expenses, CEO salary, and rent expense relating to a corporate office.

Fixed Expenses

These are the expenses you have that don't change month-to-month. Your mortgage or rent, car payment, and insurance are examples of fixed expenses. They may vary slightly from year-to-year (say, a rent increase) but overall you can count on them to stay the same for at least a year at a time.

Variable expenses are the biggest category. These include food, utilities, entertainment, and transportation costs. A variable expense occurs semi-regularly and the cost can changes depending on a number of factors. For example, you don't pay the same amount every time you shop for groceries, so the cost is variable.

Periodic payments are amounts paid at regular intervals (such as weekly, monthly, or yearly) for a period of greater than one year.

A periodic payment is when someone pays a little bit of money over time instead of paying all at once. For example, instead of paying for a toy with one big payment, you might pay a little bit of money each week until you have paid for the whole toy.

The three biggest budget items for the average U.S. household are food, transportation, and housing. Focusing your efforts to reduce spending in these three major budget categories can make the biggest dent in your budget, grow your gap, and free up additional money for you to us to tackle debt or start investing.

What is the 50/30/20 rule? ›

Key Takeaways. The 50-30-20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do. The remaining half should dedicate 20% to savings, leaving 30% to be spent on things you want but don't necessarily need.

50% of your net income should go towards living expenses and essentials (Needs), 20% of your net income should go towards debt reduction and savings (Debt Reduction and Savings), and 30% of your net income should go towards discretionary spending (Wants).

Fixed expenses are the easiest ones to grasp and usually the easiest to plan for. They happen regularly and are the same cost every time. Your mortgage payment is a fixed expense. Your car payment, insurance payment, and any other set, regular payment are all fixed expenses.

Fixed monthly expenses.

These are costs that remain constant from month to month. Examples include rent or mortgage payments, insurance premiums and subscription services. These expenses are predictable, making it easier to budget for them since you know the exact amount you'll need to set aside each month.