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Fixed Expenses

Accounting and Financial ManagementUpdated 05 Nov 2026

Fixed expenses are costs that stay roughly the same from one period to the next, whatever happens to income or activity. For a household they include rent or mortgage payments, insurance premiums, loan repayments and subscriptions; for a business, rent, salaries and software licences. In business and economics the same idea is usually called fixed costs, explained in full in the Fixed Costs entry.

The phrase "fixed expenses" is most common in personal finance and in building a budget. Fixed expenses are set against variable expenses, such as groceries, fuel or utility usage, which change from month to month. Because fixed expenses must be paid even when income falls, budgeting guides often suggest covering them first and keeping an emergency fund equal to several months of them.

Fixed does not mean permanent: rent can rise at renewal and a loan ends once it is repaid. In company accounts, fixed and variable items appear together under expenses, and the mix of the two shapes how profit responds to changes in sales.

Last updated 05 Nov 2026