Which of the following is considered a variable expense in budgets?

Food is classified as a variable expense in budgets because its cost can fluctuate significantly from month to month, depending on factors like dietary choices, family size, and seasonal availability of items. Unlike fixed expenses, which remain constant (such as mortgage payments and life insurance premiums), variable expenses are subject to changes based on personal habits and lifestyle, allowing for flexibility in budgeting.

For example, a household may choose to dine out more or less frequently, impacting their monthly food spending. This variability means that food costs can be adjusted to meet budget constraints, making it a crucial category to monitor for effective financial planning.

The other options, such as a mortgage payment and life insurance premium, are fixed expenses because they typically remain the same each month, providing stability and predictability within a budget. A gym membership may also have a fixed amount but can be seen as somewhat variable depending on whether the individual continues to go or chooses to cancel it, unlike food, where the necessity to eat creates ongoing but fluctuating costs.