What are fixed expenses?

Fixed expenses refer to regular costs that do not change month-to-month regardless of usage or consumption. These expenses typically include items such as rent or mortgage payments, insurance premiums, and subscription services where the cost remains the same over time. The consistency of these expenses makes them easier to predict and budget for compared to other types of expenses.

Understanding fixed expenses is crucial for effective financial planning since they represent obligations that must be met regularly, and failing to account for them can lead to financial difficulties. By knowing the fixed costs, individuals can better manage their overall budget, ensuring that sufficient funds are allocated for these unavoidable payments each month.