Necessities and extras

You can spend and save your money in different ways. Distinguish between costs that are necessary and costs that are extra.

Costs that are necessary are your fixed expenses. You have no choice but to pay them, or else, you get a fine or into trouble. Fixed expenses include your rent, the cost of gas and electricity, health insurance and telephone.

Food, drinks and toiletries are also necessary expenses. But for these, you do have a choice: you can choose to do your shopping at a less expensive supermarket.

You also have costs that are an extra. They can be expenses you might do out of habit, or as an indulgence, but which you could do without just fine. For example, visits to a beautician or an expensive hair treatment, or buying your meals ready made at a bakery or a café. You can make decisions that might save you on these, for example, making your own meals from home.