4.10 A Fixed and Variable Expenses

Front

What are fixed expenses?

Back

Fixed expenses are costs that do not change from month to month. Examples include rent, insurance, and salaries.

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What are variable expenses?

Back

Variable expenses are costs that can change from month to month based on usage or consumption. Examples include groceries, entertainment, and utility bills.

Front

Give an example of a fixed expense.

Back

An example of a fixed expense is a monthly rent payment.

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Give an example of a variable expense.

Back

An example of a variable expense is the amount spent on groceries each month.

Front

Why is it important to track fixed and variable expenses?

Back

Tracking fixed and variable expenses helps individuals manage their budgets, save money, and make informed financial decisions.

Front

How can you reduce variable expenses?

Back

You can reduce variable expenses by cutting back on non-essential items, shopping sales, and planning meals to avoid waste.

Front

What is a budget?

Back

A budget is a plan that outlines expected income and expenses over a specific period, helping to manage finances.

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What is the difference between needs and wants?

Back

Needs are essential items required for survival, like food and shelter, while wants are non-essential items that enhance quality of life, like luxury items.

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How can fixed expenses affect a budget?

Back

Fixed expenses can limit the amount of money available for variable expenses and savings, making it important to account for them in a budget.

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What is an example of a need?

Back

An example of a need is food.