What is a fixed expense?

What is a fixed expense?

• A. An expense that stays the same each time (like a subscription).
• B. An expense that changes from month to month (like groceries).
• C. A bill you can avoid by not spending.
• D. A one-time purchase only.

Answer: (A)

Fixed expenses are costs that stay the same every month, so they’re predictable and easy to budget for. A subscription is a good example because you’re billed the same amount regularly. In contrast, a cost that changes from month to month, like groceries, is a variable expense. A bill you can avoid by not spending isn’t reliably there month to month, so it isn’t fixed. A one-time purchase is a single expense and doesn’t recur, so it isn’t fixed either.

Fixed expenses are costs that stay the same every month, so they’re predictable and easy to budget for. A subscription is a good example because you’re billed the same amount regularly. In contrast, a cost that changes from month to month, like groceries, is a variable expense. A bill you can avoid by not spending isn’t reliably there month to month, so it isn’t fixed. A one-time purchase is a single expense and doesn’t recur, so it isn’t fixed either.