Which of the following best describes a fixed expense?

A fixed expense is characterized by its stability; it remains constant each month and is predictable. Examples of fixed expenses include rent or mortgage payments, monthly insurance premiums, and subscription services where the cost does not fluctuate. This consistency in amount helps individuals and households plan their budgets effectively, ensuring they allocate enough funds each month to cover these necessary costs.

In contrast, expenses that vary monthly, such as utilities or groceries, are not fixed because they can change based on usage or consumption patterns. Unpredictable expenses, which can arise due to unforeseen circumstances, also do not fit the definition of fixed expenses. Likewise, expenses designed to decrease over time, like certain loans where payments may reduce as principal is paid down, do not align with the characteristics of fixed expenses.