Which type of expense is classified as fixed?

A fixed expense is an expense that remains consistent and does not fluctuate significantly over time, regardless of a person's routine or activities. Rent payment is classified as a fixed expense because it is typically a regular, recurring payment that is agreed upon in a lease or rental agreement. The amount paid for rent usually does not change from month to month, allowing individuals to plan their budgets with more accuracy.

In contrast, utility bills can vary based on usage, grocery expenses can differ each month depending on consumption needs, and entertainment expenses are often discretionary and can vary significantly based on personal choices or activities. Understanding the nature of fixed expenses, such as rent, is crucial for effective budgeting and financial planning since they represent a stable outgoing cost that must be accounted for regularly.