What Is Fixed Expense?
Definition
A regular cost that stays the same amount each month, like rent, a car payment, or a subscription. Easier to budget for than variable expenses.
Example: "Rent ($1,200) and my phone bill ($50) are fixed expenses. Groceries vary month to month."
Why It Matters
Fixed expenses are the foundation of any budget because they are predictable. Since these costs don't change month to month, you can plan for them with certainty. Common fixed expenses include rent or mortgage, car payments, insurance premiums, streaming subscriptions, and loan payments. Add up all your fixed expenses first when building a budget, then allocate whatever remains toward variable expenses and savings. If your fixed expenses consume more than 50% of your take-home pay, you may be "house poor" or overextended.
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