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Incidental ExpenseIn accounting terminology an expense is any event which calls upon the use of an asset to meet a monetary obligation. Expenses may be routine or incidental. For instance in most households regular bills are received for the use of electricity, water, and telephone. Each of these bills would be regarded as a routine expense. If a member of the family was driving the family vehicle and ran over a sharp object destroying a tire, the acquisition of the new tire would be considered an incidental or emergency expense.
Tracking regular expenses and making some provision for incidental or emergency expenses is a vital part of personal financial budgeting. This is the process by which expenses are matched against income to achieve a plan of spending that allows an individual to live within their means and avoid falling into debt. Thus, expense tracking is an important aspect of debt reduction and management.
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