Which of the following describes fixed expenses?

Fixed expenses are defined as regular payments that remain constant over time, regardless of changes in personal circumstances or usage levels. This includes items like rent or mortgage payments, insurance premiums, and any subscription services that have set monthly fees.

Understanding fixed expenses is crucial for personal finance management, as they represent non-negotiable costs that must be covered each month. Differentiating them from variable expenses, which can fluctuate based on consumption or usage, helps individuals create more accurate budgets and manage their cash flow effectively.

In contrast, other options present different types of financial commitments. Costs that vary based on use are associated with variable expenses, while unexpected payments relate to irregular or surprise expenses that can impact financial stability. Costs that can be reduced or eliminated often refer to discretionary or variable expenses that can be managed according to personal financial goals. Hence, identifying fixed expenses accurately is essential in creating a clear financial picture.