Fixed expenses are those that remain stable or suffer minimal variations throughout each month. These expenses cannot be avoided and it is important to have an adequate budget to pay for them. However, it is possible to look for ways to reduce them.
In this article, you will understand how fixed expenses work, which are the most common and the best ways to reduce these expenses. Stay with us until the end and start saving today!
What are the main fixed expenses?
The main fixed expenses are those that you have to pay every month, such as monthly tax rates and your employees’ salary. In addition to these expenses, the following can also be highlighted:
- Water bills;
- Light and telephone;
- Bank charges.
It is worth noting that these expenses may vary from company to company or from family to family. It’s important that you identify your main fixed expenses and have a clear idea of how much money you need to set aside for them.
How can you reduce fixed expenses?
There are some ways to reduce fixed expenses, the main one being price negotiation, where you can negotiate with service providers such as internet and phone providers for discounts. In addition, other strategies include:
Search for offers: stay up to date on offers and promotions for services you already use or plan to use on a monthly basis.
Debt settlement in a single installment: If you have multiple debts, consider paying them off in a single debt with a lower interest rate.
In addition, reducing unnecessary consumption of water, electricity and gas can also help reduce fixed expenses and keep you more carefree at the end of the month.
What are the consequences of not paying fixed expenses?
The consequences of not paying fixed expenses can result in service cuts, such as electricity and water, or even the loss of the property, in the case of rent. In addition to these, other consequences include:
- Inclusion in default lists;
- Judicial actions;
- Interest and fines;
- Harm the credit score.
Therefore, it is important to prioritize the payment of your fixed expenses and keep them up to date. For this, remember to keep track of these expenses in a personal notebook or spreadsheet, so that you can closely monitor your financial routine.
What are the most common fixed expenses?
In addition to the fixed expenses already mentioned above, other common expenses are related to transportation, education, health and service subscriptions. This is because these expenses are directly related to social rights.
In view of this, most families have monthly expenses with health plans, children’s school fees, subscriptions to streaming services, bus tickets, among others.
Are there alternatives to fixed expenses?
Although there are strategies to reduce fixed expenses, there are no alternatives for them. That’s because fixed expenses are the essential expenses for a company to keep running. Or even for a family to live with dignity and comfort.
In summary, fixed expenses are a fundamental part of business and personal finance. With this, it is important to have a good understanding of them. By identifying your fixed expenses and looking for ways to reduce them, you can increase your financial security and reach your goals.
Hope this article was helpful for you. Always remember to control your fixed expenses through notes or spreadsheets, so that you are not caught by surprise at the end of the month. Thank you and see you next time!