So now that we have a handle on how much we make every month, let’s discuss expenses. There are two kinds of expenses: committed and discressionary. Your committed costs are those expenses that you pay month after month, with little variation. Committed costs include (but are not limited to) housing, debt, utilities and insurance. Discretionary costs are those you have more leeway with. Those costs include (but are not limited to) groceries, gasoline, entertainment and gifts. More people consider savings a discretionary cost, but I consider them a committed cost. Savings should be a necessary part of your budget, even if it’s only a few dollars per paycheck. We’ll discuss savings in a future post.