Why is it important to understand variable expenses in budgeting?

Understanding variable expenses in budgeting is crucial because these expenses can be controlled and adjusted according to your financial situation or goals. Unlike fixed expenses, which remain constant and are often necessary, variable expenses, such as entertainment, dining out, and certain utilities, can fluctuate and are more flexible. This means individuals have the ability to make changes to their spending in these areas, allowing for better financial management and the potential to save money when necessary. By closely monitoring and adjusting variable expenses, individuals can adapt their budgets more effectively to respond to changes in income or unexpected financial challenges.