What are fixed expenses?

Fixed expenses refer to set costs that remain constant over time and are essential obligations that an individual or household must pay. Examples include rent, mortgage payments, and insurance premiums. These expenses do not fluctuate from month to month, making them predictable and easier to budget for compared to variable expenses, which can change based on consumption or other factors.

Understanding fixed expenses is crucial for effective financial planning. They represent necessary investments that support one's living arrangements and financial responsibilities, ensuring stability and security. This clarity aids individuals in assessing their overall financial health and planning for both short-term and long-term goals.

The other choices describe costs that are typically more variable or optional in nature, which do not align with the defined characteristics of fixed expenses.