Which of the following can be considered a fixed expense?

Master personal finance with the DECA Personal Financial Literacy Exam. Use flashcards and multiple choice questions to deepen your understanding. Prepare for success with detailed explanations and expert tips!

Rent is a classic example of a fixed expense because it typically remains constant over a lease period, meaning the amount you owe for rent does not fluctuate month to month. This consistency allows individuals and households to budget more accurately, as they can reliably plan for this outgoing payment each month.

In contrast, groceries can vary significantly from month to month, making them a variable expense. Entertainment costs can also change based on lifestyle choices and activities, leading to unpredictability in budgeting. Utilities may have some variability in payment due to usage, seasonal changes, or differences in billing, which can also classify them as variable expenses. Therefore, rent is the most straightforward representation of a fixed expense among the provided options.

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