Ben and his housemates signed a lease for an apartment for 12 months for $563 per month of which Ben agreed to pay $215 per month. Which of the following statements best gives the reasons that Ben’s rent payment is an essential (fixed) expense?

Question

a.
It cannot be eliminated in a later budget, in order to save money.
b.
Living expenses have a higher priority than any other type of expense.
c.
The spender controls the amount of the rent by choice of apartment.
d.
He agreed to pay the same amount every month.

Answer 1

The statement that best gives the reason that Ben’s rent payment is an essential (fixed) expense is:

d. He agreed to pay the same amount every month.

This statement highlights the fixed nature of his rent payment, as it indicates that the amount he will pay remains constant throughout the lease term, making it a predictable and essential expense in his budget.