IXL | Identify fixed and variable expenses

Reagan just bought a used car. She pays $175 per month to the bank for her car loan.

Is Reagan's car loan payment a fixed expense or a variable expense?

fixed expense

variable expense

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question

Last month, Neil ate out at restaurants several times. He spent $60 more than he expected. This month, to save money, Neil has decided to cook all his meals at home.

Is the money Neil spends eating out a fixed expense or a variable expense?

fixed expense

variable expense

key idea

Your expenses are the money that you spend.

Expenses that you must pay regularly and are the same amount each time are fixed

expenses.

Expenses that you do not have to pay regularly or whose amount can change are variable

expenses.

solution

Last month, Neil ate out and spent more than he expected. This month, he won't eat out at all. So, the amount of money Neil spends eating out changes from time to time. The money Neil spends eating out is a variable

expense.

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