What could be an example of a variable expense?

Variable expenses are costs that can fluctuate from month to month based on usage, choices, or consumption. Monthly entertainment subscriptions are a prime example of a variable expense because these costs can change depending on personal decisions, such as adding or canceling services or subscriptions, or varying their level of use. For instance, a person might subscribe to additional streaming services for a particular month and then remove them the next month based on their entertainment needs, which directly affects their monthly budget.

In contrast, health insurance premiums, property taxes, and mortgage payments typically represent fixed expenses. Health insurance premiums have a set amount that remains constant during the policy period, property taxes are usually assessed on an annual basis providing predictable costs, and mortgage payments are fixed amounts established in the loan agreement. These expenses do not vary with immediate choices or usage, thus distinguishing them from variable expenses like monthly entertainment subscriptions.