three major types of expenses

Three Major Types of Expenses

Three Major Types of Expenses

The next step in setting up a budget is to list your monthly expenses. There are three major types of expenses we all pay: fixed, variable, and periodic. Do you know the difference?

A “fixed expense” is a cost that does not change from time period to time period, or changes only very slightly. Which of these is a fixed expense?

  1. Your grocery bill
  2. Home repairs
  3. Your mortgage or rent

The correct answer is “C.” Car payments, real estate taxes, and life insurance premiums are also fixed expenses.

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