Question

Tiffany created a spreadsheet detailing her expenses for the first six months of the year. According to her spreadsheet, which expense is one of Tiffany’s variable expenses?

a. Car loan payment
b. Groceries
c. Insurance payment
d. Rent
e. Savings account

Answer 1

Groceries represent a variable expense in Tiffany's budget because the cost can change each month, unlike fixed expenses such as a car loan payment or rent.

Step-by-step explanation:

Tiffany's variable expenses are costs that can fluctuate from month to month. Among the options given, groceries is a variable expense because the amount she spends can vary widely based on her choices, sales, season, and other factors. In contrast, a car loan payment, insurance payment, rent, and savings contributions are typically fixed expenses with consistent amounts due each period.

Answer 2

Among the listed options for Tiffany's expenses, groceries are identified as a variable expense because they can fluctuate month to month.

Step-by-step explanation:

The student question asks which expense in Tiffany's spreadsheet is a variable expense. Among the listed options, b. Groceries would be considered a variable expense. Variable expenses are costs that can change each month depending on consumption and purchasing choices, whereas fixed expenses remain the same each month. The car loan payment, insurance payment, rent, and a consistent savings account contribution are typically fixed expenses.

In the context of budgeting and managing personal finances, distinguishing between fixed and variable expenses is vital for creating a realistic budget and planning for financial flexibility.