TYPES OF SPENDING

Duration 2mins:10 secs

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PRESENTER
When you buy something, pay someone to help you or give money, you are spending.

Spending is an essential daily activity.

Display: Types of Spending
Basically, there are two types of spending: fixed and variable spending.
Fixed spending
Fixed spending are recurring expenses that rarely changes in any period. This can be monthly
like electricity bill, insurance and rents and they tend to occupy the largest part of your budget
Shaving money off these “fixed payments” will increase your savings a bit. Let’s say you spend
from N60,000 to N40,000 on rent, over one strong decision to move from the island to
mainland, just one decision.
N20000, N240000
You just saved N20,000 every month and N240,000 in one year!
Variable Spending
Variable spending are those expenses that can change over time. These costs differ on how you
use certain products or services.
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Transition from office to car
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Comes out of the car/reclines on it
For example, car maintenance expenses depend on how much you use your car.
Variable expenses may be hard to reduce compared to fixed expenses because it depends on
your lifestyle.
Transition to office
If you usually eat out, to reduce food expenses try cooking at home or if you are a cab person
try BRT. This takes a while to get used to but it is rewarding.
Classify expenses to trim
 It is easy to find where to trim your expenses by classifying them into
Needs and necessities
Needs and necessities. Necessity of life like food, is not good to cut back on
Savings
Savings, the money kept aside for savings or emergency fund, investment and the one for
vacation
Desires
Desires, all other expenses, find ways to cut back on some unnecessary expenses here like new
clothes, phone and when you want to chill with the big boys and girls and so on
In conclusion let me quote Warren Buffet, “Do not save what is left after spending but spend
what is left after saving.”