Credit And Debt Spending Analysis

What is a "spending analysis"?

A spending analysis is a just a way of tracking your expenses to see where the money's going. That's the biggest problem that people have. They say all the time, "I live from paycheque to paycheque, I don't know where the money goes." A spending analysis doesn't necessarily have to be a budget, so you're not putting yourself in a straightjacket of "Oh, I can only spend so much here and so much there." But at least it's helpful to know where the money is going.

What are "fixed" and "variable" expenses?

Your fixed expenses are the expenses that are the same every month, and the one's that you can't avoid. That would be the the car payment, the mortgage payment, the rent, the car insurance, and that sort of expense. The variable payments would be items that vary from month to month. It's discretionary spending. It's entertainment, clothing, or food away from the home i.e. restaurants. It's really good to know the difference between fixed expenses and variables expenses, because the fixed expenses you have to make every month, but the variable expenses you don't. So when people say, "I am living from paycheck to paycheck. I can't cut back on my spending." Sure you can and this is where it is in all these variable expenses and it really pays to know what they are.