Explain the difference between fixed expenses and variable expenses in a personal budget. Where can most...

Explain the difference between fixed expenses and variable expenses in a personal budget. Where can most people make positive changes in their budget?

Expert Solution

Deifference between fixed expense and Variable expense in personal Budget.

"Survival of the fittest" is term which we all must be acquinted with. In various stages of life whish human come across, the modus operandi of living also changes. As and when, the association grows the expenditure also grows. Have a tightinig on expenditure is the key of saving which will be helpful post retirement when cash inflow starts declined. The fist step in the "tigtening of expenditure " is segregation of personal expenditure in to fixed and variable. And then detrmine the liquidity postion.

Fixed expense in personal budget are the expenditure which will remain same for entire period. For example if anbody have taken car through bank finance then the EMI repaymnet is the fixed expense.

Variable expense are the expense which will vary from month to month and are not same. For example utility bill, expenditure on food, phone bill etc.

jeff jeffy answered 2 years ago

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