What are fixed expenses?

Fixed expenses refer to costs that remain constant each month, regardless of changes in personal consumption or spending behavior. These could include rent or mortgage payments, insurance premiums, and loan repayments. Because these expenses do not fluctuate, individuals can more easily predict and plan their monthly budgets around them. In contrast, costs that vary from month to month, unexpected expenses, or expenses solely related to utilities represent different categories of financial obligations. Understanding fixed expenses is critical for effective budgeting and financial planning, as they form a baseline for monthly expenditures that must be accounted for.