Home Feat 4 Types of Spending

4 Types of Spending

In this article I would like to narrow down valid channels of expenses. This is relative to the discipline of financial management, focusing on personal spending rather than organisational budget management.

Have you ever been wondering where your money goes to when the amount of money in your account is getting smaller and smaller towards the end of the month? A start in order to better manage your budget is to know where all the money goes. In a high level you can utilise the categories of spending that I am describing below.

If you would like more insight on your spending you could look into personal accounting software if you are a self-employed or why not try out a finance app such as Numbrs from Centralway (available on iOS and soon on Android), which combines all your online banking and spending information into a sleek and useful centralised interface.

Dictionary.com defines spending like this:

“to pay out, disburse, or expend; dispose of (money, wealth, resources,etc.)”

I could identify the following four major types:

  1. Impulse buying
    Emotional spending is required for ad-hoc desire and/or demand fulfilment.
  2. Fixed costs
    Spending is required to cover either fixed or semi-fixed expenses for living and lifestyle costs.
  3. Investment
    Financial investment is being done with the goal to increase the overall funds.
  4. Ethical or social spending
    Loans or donations are being made without fundraising drive (a good way of doing that online is the crowdsourcing portal “Kiva”).

In general for all things investing and financial terms I recommend Investopedia.com. They are “the Wikipedia of finance” and also have great educational videos that explain terms. My favourite is the Fat Cat CEO.

If you believe there are more types or if you have any other feedback, don’t hesitate to drop a comment below. Other than that I hope this was a help in order to bring more transparency into your spending behaviour.

This article has been previously hosted on my no longer maintained blog and was originally published in 2012.

Happy spending!

Photo credit: Thomas Galvez

Was this post helpful?

Christopher Isak
Christopher Isakhttp://www.christopherisak.com
Hi there and thanks for reading my article! I'm Chris the founder of TechAcute. I write about technology news and share experiences from my life in the enterprise world. Drop by on Twitter and say 'hi' sometime. 😉