What are the three types of expenses in a personal or household budget?
1. Housing, Utilities, Food
2. Bills, Needs, Wants
3. Fixed, Flexible, Discretionary
4. Pay now, pay next month, pay when able
Answer:
3. Fixed, Flexible, Discretionary
Budgeting expenses are typically categorized as FIXED – consistent monthly costs that are non-negotiable in the short term such as rent, car payment, or insurance premium; FLEXIBLE – necessary – but fluctuating – expenses that can often be decreased with conscious effort such as groceries, gas, and utilities; and DISCRETIONARY – non-essential spending decisions based on lifestyle (and the first to be trimmed when budget tightening is necessary) like dining out, entertainment, and vacations.
