What are fixed expenses?

Study for the GradReady Real-World Finance Exam. Utilize flashcards, multiple-choice questions, and detailed explanations to grasp essential financial concepts. Prepare for success!

Fixed expenses are costs that remain unchanged over a specified period, typically from month to month. Examples include rent or mortgage payments, car loans, and insurance premiums. These expenses are predictable, allowing individuals and businesses to budget accordingly. Unlike variable expenses, which can fluctuate based on usage or consumption, fixed expenses provide a stable foundation for financial planning since their amounts do not vary throughout the committed timeframe. This consistency is essential for managing cash flow and ensuring that there are sufficient funds available for these mandatory payments each month.

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