Fixed expenses are costs that have a set price per month. These expenses include things like rent and car payments. Flexible expenses are any monthly expenditure that can easily be changed, reduced, or eliminated from your budget. These expenses include things like your cable subscription and grocery bill.
What are flexible expenses?
A flexible expense is a discretionary purchase that can be altered or eliminated without a significant downside. These are non-essential expenses that stand in contrast to fixed expenses. Economists often use the term consumer discretionary spending to describe flexible expenses.
What is the difference between fixed expenses and variable expenses?
Fixed expenses: These are costs that largely remain constant, such as your monthly rent. Variable expenses: These are costs that vary or are unpredictable, such as dining out or car repairs.
What is the difference between fixed and discretionary expenses?
Still, fixed costs are tough to reduce in the short term. By contrast, discretionary expenses—like vacations, entertainment and eating out—can be quickly eliminated if the need arises. That need might arise if you find yourself out of work or you suddenly need to pay for, say, a major home or car repair.
What is an example of a fixed and flexible expense?
Flexible Personal Expenses Some people who budget accurately spend a fixed amount on most items, such as food, entertainment and automobile expenses. Medical expenses are typically an example of a fixed and flexible expense.
Is rent a flexible expense?
In their most basic sense, fixed expenses do not change over time and flexible expenses do. In most individuals’ budgets, monthly mortgage or rent payments are fixed. Flexible expenses may change each month or only occur during certain times of the year.
Is internet a fixed expense?
Some examples of fixed costs include: Rent. Telephone and internet costs.
