What to include in monthly outgoings?

What to include in monthly outgoings?

A person’s monthly expenses

In this article we will address the topic of business expenses so that you can know and recognize the different types and the best way to manage them. We will also detail tips on how to reduce costs and the possibilities of digitizing this task with an expense control software.

An expense can be defined as simply the outflow or outflow of money, whether in cash or other means of payment, as well as any item that decreases the profit or increases the loss of the organization.

In other words, they will be those company expenses that are not direct costs of production but are necessary for it to function. In this category we find all those derived from administration, premises, logistics and payroll. Thus, expenses arising from raw materials or manufacturing materials are exempted.

Knowing and being aware of these expenses is the first task that every company should carry out in order to manage them correctly. Some of the most common and transversal to the different types of organizations are:

Necessary expenses

You may think the terms “cash flow” and “expenses” are only used in the office, but being good with money is a universal concept, whether you’re running a business or just making sure your family doesn’t overspend. It’s essential to have a clear understanding of the funds you bring in each month and the money you spend; you can’t manage a budget if you don’t really know what it is.

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Of course, everyone would love to save $1,000 a month, but that’s not something the vast majority of people can do. Set budgets and spending plans that are achievable. If you want to save $400, but your monthly bills are steadily eating away at it, you’ll start to think you’re continually overspending and suffer all the stress that comes with it. In reality, $300 USD in savings is something to be proud of, and you shouldn’t feel guilty about having to pay the bills.

Many online banking platforms allow you to set savings goals and will send you a warning email if you are in danger of going overdrawn. Check with your bank to see if you can create a set goal or limit your spending so you have more than one set of eyes on the money coming out of your account every week. Even if your bank doesn’t allow it, there are plenty of other spending apps out there, and once you get in the habit of tracking your spending, you’ll have a much clearer picture of just what precisely is being set aside month to month.

What are the monthly expenses

Drawing up a monthly spending budget is the first step in taking care of our finances and making the right decisions, those that will allow us to face our financial future with greater security and stability.

The same happens with the subject of leisure. It is not reasonable to calculate monthly expenses without considering that several times a month you will want to go out to eat, watch a movie or have a few drinks with friends.

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Including an amount for those leisure and fun activities that you deserve will help you to have a more realistic monthly spending budget and also to avoid feeling guilty for spending outside of what you had planned.

Therefore, you should include this item in your budget, either to spend a little each month and buy something new each month, or to set aside a little money each month for annual/semi-annual purchases.

Electricity, water or telephone are bills that surely do not go unnoticed when you are preparing your monthly budget, but what about those that do not arrive every month? It can be the payment of the Real Estate Tax or the garbage tax, even the car or house insurance.

Monthly expenses of a person in Mexico

You can have a general idea of how much you are spending, but when making a monthly spending plan, the idea is to make it as detailed as possible. This way you will have more visibility not only of how much, but also of what you spend the most on.

The idea is to make the list as detailed as possible. Although with variable expenses it can become complicated, especially if you do not record them at the time you did it, because over time you tend to forget some of the purchases, especially if they are minor.

Having a detailed record allows you to know how much you are spending and what your limit is, to avoid having to stretch the money every month, or to be asking for loans because you did not have enough.

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