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Working with expenses

Not all of the money you spend in a given month goes towards your debts - there are other recurring expenses that you have to pay just to survive. Rent (but not a mortgage! That's a debt!), electricity, water, and so on. You have to spend the money or else you're not going to make it to the next month.

Please note that an expense is considered something that's fixed, or at least reasonably fixed. Your rent doesn't vary from month to month, your cable bill doesn't change, your cell phone bill is probably constant. Some of the money you spend goes to unfixed things, like food or gas or movie rentals. Setting up a fixed expense for those items isn't quite accurate, since it's not like you write a check for $20 to the video store each month for your rentals. Instead, you should segment your account with virtual budgets to set aside money to fund these activities. See Setting up budgets for more info.

There's also a set of pie charts to quickly show you how this debt factors into your overall financial picture.