Now that we understand the basics, let's take a look at the sample budgets of an imaginary person, Tom, as he moves through the budgeting process. Notice that Tom's net income is $3000 a month, while his discretionary income is a mere $16 a month. As you progress through the lesson, ask yourself whether Tom's expenditures are variable, fixed, or periodic. Variable expenses, such as grocery and clothing costs, can often be reduced or eliminated in the budgeting process. Fixed expenses, such as your mortage or car payments, are set by the terms of your original contract with the lender, though you may be able to renegotiate these with your lender if you meet their criteria. Periodic expenses, such as property taxes, car registrations, membership fees, etc., are those obligations that are only due a few times during the year. Nevertheless, they should also be accounted for in your adjusted budget to avoid any last moment surprises.