Fixed Expenses
BudgetingGlossary term
Definition
Recurring costs that remain the same amount each month, such as rent, mortgage payments, car payments, and insurance premiums. Because they are predictable, fixed expenses are the easiest part of a budget to plan for.
Related terms
- Variable ExpensesCosts that fluctuate from month to month, such as groceries, utilities, gas, and entertainment. Tracking variable expenses closely helps identify spending patterns and opportunities to save.
- BudgetA financial plan that outlines expected income and expenses over a specific period. Creating and following a budget is essential for managing money and achieving financial goals.
- Needs vs WantsA fundamental budgeting concept distinguishing between essential expenses required for survival and well-being (needs) and non-essential expenses for comfort or enjoyment (wants). The 50/30/20 rule suggests allocating 50% to needs, 30% to wants, and 20% to savings.
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