Which of the following is an example of a fixed expense?

• A. Rent.
• B. Groceries.
• C. Dining out.
• D. Entertainment subscriptions.

Answer: (A)

Fixed expenses are costs that stay the same every month, making them predictable and easy to plan for. Rent fits this perfectly because you pay a set amount each month to have a place to live, regardless of how many meals you cook at home or how often you go out. The amount doesn’t depend on usage or consumption, just the housing agreement you signed. Groceries and dining out vary with how much you buy and how often you eat out, so they’re considered variable expenses. Entertainment subscriptions can be a recurring fee, but they aren’t always perfectly fixed—charges can change if you upgrade plans or incur extra fees—so they aren’t as consistently fixed as rent. That’s why rent is the clearest example of a fixed expense.