Fixed vs Variable Expenses Explained

The video tutorial by Miss Humbert introduces the concepts of fixed and variable expenses. It explains what expenses are and provides detailed examples of both fixed and variable expenses. Fixed expenses are those that remain constant over time, such as rent or a car payment, while variable expenses fluctuate, like groceries or utility bills. The tutorial includes a practice session to help distinguish between the two types of expenses, enhancing understanding through real-life examples.

What is an expense in general terms?

• The amount of money invested in stocks

• The amount of money spent on purchases

• The amount of money earned from a job

• The amount of money saved each month

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Which of the following is a fixed expense?

• Monthly grocery bill

• Car payment

• Clothing purchases

• Electricity bill

What does a fixed expense imply?

• The cost is predetermined and does not change

• The cost fluctuates based on usage

• The cost is split between multiple people

• The cost is decided by the government

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What is true about fixed expenses?

• They are unpredictable and sporadic

• They can vary depending on the month

• They remain constant regardless of usage

• They only occur once a year

Which of these is a fixed expense?

• Gasoline for cars

• Monthly rent

• Car repair costs

• Birthday party expenses

What characterizes a variable expense?

• It changes from month to month

• It remains the same each month

• It is only paid once a year

• It is not related to money

Which example fits a variable expense?

• Car insurance

• Rent payments

• Netflix subscription

• Utility bills

Which scenario describes a variable expense?

• Cost of a doctor's visit

• Monthly mortgage payment

• Yearly gym membership fee

• Annual subscription fee

Identify a variable expense from the following:

• Life insurance premium

• Cable TV subscription

• Electricity consumption

• Internet bill

What distinguishes a variable expense?

• It varies based on factors like consumption

• It is the same each period

• It is always related to entertainment

• It is a one-time payment