Each month, you’ll likely spend in three categories of expenses: fixed, variable, and discretionary. Fixed expenses are necessary ongoing costs that don't change in amount or frequency. Some examples include rent, health insurance, or a phone plan. Variable expenses are still considered necessary costs, but the amount you spend changes every month. The amount you spend on groceries or clothing each month can be considered variable expenses. Discretionary expenses are those expenses that you desire and would like to have but do not necessarily need, such as a dinner out at a restaurant or concert tickets.