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Are your fixed expenses really non-negotiable?

April 27, 2018  |  #Money Management

Learn how you can trim the unnecessary fat from your budget.

Finance is a constant thing – it’s important to update your budget as circumstances change, whether that’s a result of a career shift, a raise or new expenses.

Each time you update your financial plan, it’s easy to overlook expenses you consider to be “fixed”. You might think of these as non-negotiable, but is there a better way to manage your fixed expenses?


Expense management might be something that you may not have mastered quite yet. Contact one of our advisers today to get help.

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What are fixed expenses?

When we talk about fixed expenses, we’re referring to recurring costs – things we’re billed for regularly, be they necessary or luxury.

Fixed expenses often include:

  • Rent or mortgage repayments.
  • Other debt repayments like student or car loans.
  • Mobile phone contracts.
  • Recurring services such as lawn care.
  • Council fees.
  • Insurance
  • Subscriptions to gyms, streaming services or similar.
Because we expect these expenses, they’re easy to just accept for what they are. However, is that sensible?

Are your fixed costs too expensive?

Basic needs now account for 60 per cent of our spending, according to the ABS.

Quite possibly.

There are some fixed costs which are required to live. However, weekly spending on energy, housing and medical needs has risen over 25 per cent over the past six years, says the Australian Bureau of Statistics (ABS). In fact, basic needs now account for 60 per cent of our spending.

Meanwhile, unnecessary recurring costs such as an unused Netflix subscription, a lawn mowing service or a landline fee, may be small expenses that quickly build up to draw funds away from your savings.

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Cutting the fat off your fixed expenses leaves more room in the budget for the things that make you happy.

How can you break the fixed cost illusion?

Breaking free of this idea that fixed costs are “okay because I can predict them” is the key to developing an effective budget.

Follow these steps to optimise your budget:

1. Isolate your fixed costs: Determine how much you spend on these expenses each month. Then, figure out which ones are temporary or unimportant.

2. Let go of unnecessary subscriptions: Say goodbye to any unused memberships or other luxury expenses that you can still feel comfortable without.

3. Build a plan to eliminate temporary expenses: Mortgages are expensive, but they aren’t forever. Create a strategy to pay off your loan faster and create more room in your budget.

4. Find a better deal: Power is a basic need, so you can’t simply forego it. That said, is it possible you could get a better deal? The same goes for payments on your broadband, mortgage repayments or rent, and even grocery bills. Shop around for the best deals on the market but stay wary of promotional periods making something sound better than it is.


There are so many different dynamic factors that can affect your budget, and on top of full-time work and a family, it can be hard to manage alone. Contact us today to help you save without scrimping.

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