Fixed expenses are predictable and don’t fluctuate much. They include rent, insurance, mortgage payments, and car payments. Other loans, including Variable costs, are more flexible. They depend on the month, your income, and other factors. Examples include food, gas for your car, and entertainment. When creating a budget, you shouldn’t focus only on your fixed expenses. You can lower them by looking for better deals on insurance or refinancing your mortgage or car loan.

But understanding fixed expenses is essential when trying to figure out how to make ends meet with less money. We recommend using the 50/30/20 rule as a guide for budgeting: Allocate 50% of your take-home pay to necessities, 30% to discretionary spending, and 20% to savings. But if you’re struggling to make ends meet because of a layoff or unexpected expense or want to save more, cut back on discretionary spending first. Before touching fixed or variable necessities, you’ll have an easier time making sure your basic needs are still covered.