What is an example of a variable expense?

A variable expense is one that can change from month to month and is not fixed. In this context, the utilities bill that fluctuates serves as a prime example of a variable expense. This is because the cost of utilities, such as electricity, water, and gas, can vary based on consumption, seasonal changes, and other factors. Unlike fixed expenses, which remain constant (like rent or salaries), variable expenses can be adjusted based on personal usage and habits.

The other options represent fixed expenses, which create consistent costs that do not typically change from month to month. Rent payments remain stable, insurance premiums are generally set for a policy period, and salaries are predetermined and do not fluctuate within that timeframe. Therefore, understanding the nature of various expenses is crucial for effective personal finance management, as it helps individuals plan and budget more accurately based on their income and spending patterns.