Distinguishing Fixed and Variable Expenses

What does it mean to 'distinguish' between expenses?

• To identify the amount of each expense

• To classify expenses into categories based on amount

• To recognize the differences between types of expenses

• To calculate the total of all expenses

In the context of budgeting, why is it important to distinguish between fixed and variable expenses?

• To calculate total annual income

• To avoid overspending on luxury items

• To better plan financial savings and spending

• To ensure all expenses are paid on time

What is a characteristic of a fixed expense?

• The cost is unpredictable and can vary each month

• The amount is consistent regardless of time or usage

• It only applies to luxury items

• The cost changes based on usage

What is an example of a fixed expense from the video?

• Entertainment

• Groceries

• Gasoline

• House payment

Which of the following is an example of a variable expense?

• Gym membership

• Mortgage payment

• Car payment

• Electricity bill

Which expense type fluctuates based on choices and needs?

• Fixed

• Variable

• Both fixed and variable

• Neither fixed nor variable

What scenario was used in the video to explain variable expenses?

• Buying a new car

• Paying for a vacation

• Subscribing to a streaming service

• Dining out at different restaurants

Why might a cell phone bill become a variable expense?

• If the user stays within their usage limits

• If the user exceeds the allotted data or minutes

• If the service provider offers a discount

• If the bill is paid on time every month

What determines whether an expense is categorized as fixed or variable?

• The necessity of the expense

• The payment method used

• The consistency of the cost

• The type of expense

How can one calculate total expenses from given fixed and variable expenses?

• By adding fixed and variable expenses

• By subtracting fixed expenses from variable expenses

• By averaging all expenses

• By dividing fixed expenses by variable expenses