You have to pay for them no matter what because you either need them or are a financial responsibility. So, essential expenses are, well, essential. However, things such as clothes, shoes, makeup, video games, gym membership, and, yes, even the Netflix subscription, are non-essentials. For example, expenses such as rent, mortgage, utilities, groceries, or medication are essential ones that you need to pay for living. While essential expenses are every expense related to living, non-essential expenses are usually the expenses that you don’t necessarily need. The names of the two are pretty self-explanatory. What finally helped me overcome my budgeting struggle was when I gained an understanding of the three types of expenses: fixed, periodic and variable. The idea of planning for my expenses, at least beyond my rent payment, was far outside my comfort zone. I had a very general idea of what my expenses were but inevitably I would spend way more than I thought I would. When bills came due I never really knew if I had the money to pay them. How did I know how much money I was going to need in September when January had barely started?įor years I had been living paycheck to paycheck just hoping my money would last until the next check came in. The holiday season had just ended and the next one seemed forever away. It was a daunting task to think about what my expenses would be for the next twelve months. When I first started budgeting, I set up an excel spreadsheet for the year. There are three major types of expenses we all pay: fixed, variable, and periodic. Your income tax return (long and short forms) will require you to include your dependent care provider's name and tax number or Social Security number.The next step in setting up a budget is to list your monthly expenses. If you are married, both you and your spouse must be working or a full-time student during the time the care is received. Elderly dependent care may include your cost to send a dependent parent to an elderly daycare facility or to have someone to care for them in your home. A person qualifying for this type of care must spend at least eight hours a day in your home. Also, expenses for dependents of any age who are unable to care for themselves because of a physical or mental handicap are eligible. The Dependent (Child) Care Spending Account provides you with the opportunity to use tax-free dollars to pay for the care of your children under age 13 or other IRS eligible dependents while you and your spouse work or go to school full time.Ĭhildcare services may include your cost to send a child to preschool, after school, or nursery school. Specialized equipment for disabled personsĪ few examples of expenses that are not eligible include:ĭependent (Child) Care Spending Account (DCSA).Costs for procedures not covered or not covered fully by a health, dental or vision plan.Deductibles and co-payments not paid by any health or dental insurance in which you or your family members participate.The Health Care Spending Account helps you save tax dollars on the health related treatment you and your family receive. The IRS rules and the rules of the Employee Benefits Plan Council designate eligible expenses and the Employee Benefits Plan Council has the responsibility to interpret these rules and make all decisions as to an expense's eligibility. Once you enroll, you may submit claims for services incurred on or after the first of the month after you have completed one full calendar month of employment.įlexible Spending Account (FSA) plan options are administered by WageWorks. Your total contributions to each account are prorated by the number of months you participate in these options up to the maximum monthly amount allowed for each account. For monthly payrolls, the full reduction will be taken once a month after your first full calendar month of employment. Your paycheck reductions for the spending accounts will start the 15th of your first full calendar month of employment.
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