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Fixed Expense Definition

Personal Finance Definitions


Definition: Fixed expenses remain the same no matter how much you use of a or service or consumer item. The cost of a fixed expense doesn't change from one period to another or changes only very slightly and are usually paid on a regular basis, such as week to week, month to month, quarter to quarter or year to year. This consistency makes this type of cost is easier to budget for than a variable expense.

Typical household fixed expenses are mortgage or rent payments, car payments, real estate taxes and insurance premiums.

In small business a fixed cost is a regular expense that doesn't change according to production. Typical small business fixed expenses are charges for internet access, long-term machine rental and insurance.

Also Known As: Fixed Cost

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