• Ryan P. Cleary

Float Finance 3.3: Managing Expenses



In this article we will overview different types of expenses and ways to effectively manage them. This will help you decide how to save and spend your income.

Float Finance is a series of accessible articles, tools, and resources designed to empower early career employees and students to navigate their financial journey


Ways to use your money

You can break the ways you use money into three categories:


  • Saving it

  • Sharing it

  • Spending it


Collectively, these three categories are called expenses.


Saving your money

You can save your money to build an emergency savings fund to help you in case of a major reduction in income, such as from a job loss, or to pay for a major, unexpected expense. You can also save money for short-term goals like back-to-school expenses or long-term goals like retirement.


Sharing your money

You can share your money with friends, family, charities, or others.


Spending your money

You can spend your money now to pay for basic living expenses like food, housing, utilities, and debts you owe, and on other things you need or want.

Ways to think about expenses

It can sometimes be helpful to think about expenses in three different ways:


  • Needs: Expenses you must have to survive

  • Wants: Expenses that are “nice-to-have” but you can survive without

  • Obligations: These are expenses which are required due to activities such as: Borrowing money (such as a car loan or mortgage), Contractual obligation (such as rent), Court mandated (such as child support payments)


Different people may consider needs and wants differently. We encourage you to carefully consider if something is a must-have (need) or just nice to have (want). This can sometimes be difficult- if you aren’t sure we suggest asking yourself if it is something that would affect your ability to work or remain healthy. If not, it is probably a want.


Once you identify your needs, you can consider if there are less expensive ways to meet those needs. For example, is there a less expensive place to buy groceries or could you plan further ahead so you can pick up groceries on sale?

Next, you can consider your obligations- if you are struggling to pay those it may be worthwhile to see if there is a way to negotiate payment plans or reduce the obligations.


A note on public benefits

If you receive public benefits, resource or asset limits may also affect your decisions about how to use your money. These limits are important to understand- we recommend researching any programs you are part of to better understand any special limitations that may affect you.



Understand your monthly expenses

Understanding where your money goes is critical. We recommend two tools to help you understand your monthly expenses and help put you on track for success.


Expense Tracking Log or Diary

Your expenses likely are different depending on the time of month, so we recommend logging your daily expenses for daily for at least a month. Don’t worry too much about making any changes- we want you to first have an accurate picture of what your expenses are like in a typical month. You can do so using an app, spreadsheet, or just pen and paper.


Expense Summary

Once you finish tracking your expenses you may use the information to create a monthly summary of your expenses and divide them into different categories.


Managing your expenses

Knowing what expenses you normally have helps you make payments in advance or on-time so that you avoid nasty surprises like late fees, interest, negative credit report entries, loss of services, or additional fees.


There can be many ways to pay expenses:


  • You may be able to pay in-person using cash, check, debit card, or credit card. Some bills require being in person while others may only be available via mail or the internet.

  • You may be able to pay by mail using a check. When paying by mail, make sure to leave extra time for the check to arrive!

  • You can pay electronically. These payments are usually online and may be one-time or could be made automatically on a schedule (“auto-pay”). There are several different ways to set up electronic payments. You may be able to set them up directly through your financial institution through a bill pay service or directly through the entity you owe money to (like your utility company). When you pay your expenses electronically you are giving your financial institution permission to pay the bill via your credit card, debit card, or directly from your bank account.

No matter how you pay, we suggest keeping a monthly payment calendar on paper or online. You can use it write down when you need to pay an expense or mail a check. You ideally should have this date be before the actual due date.



Understanding your expenses will help you decide how to save, share, and spend your income. Try tracking your expenses and use that to determine what is a need and what is a want. Put together a calendar to help you avoid missing any payments.

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