What is the difference between a fixed and variable expense?

    Published: 06-16-2009
    Views: 15,019
    Financial expert Kandance Beamon explains the difference between and variable expense.

    Speaker: What is the difference between a fixed and variable expense?

    Kandance Beamon: The difference between a fixed and variable expense would be, fixed expenses are those things that don't change from month to month. They are the things such as your rent or your mortgage, such as that car payment. Those expenses that every month you know will be a set amount. The variable expenses are those things that depend on your usage. So there will be things like your cell phone bill, because may be you don't use your cell phone a lot that month and your bill might be lower or may be you are going over your minutes and your bill would be higher than what it typically is or may be you have extra amount of text messages on your cell phone bill and that what causes your bill to go up an additional $20, $30. So really looking at the fixed expenses are those things that you can set your watch to, you know every month they will be here and you will have to pay your rent, your mortgage, your car no, your home owner's fees, all of those things and your variable expenses would be things like your electric bill or your utilities because they will depend on usage. Your water bill, your cell phone bill and also too, variable expenses are those things that may not come every month. So it may not be a monthly bill, it may be a bill that comes every quarter, which would be a periodic bill, however it would also be based on your usage.