Question

Why are fixed expenses difficult to reduce?

Answer 1

Your budget is comprised of both fixed and variable expenses. ... It's much easier to budget for fixed expenses than a variable expense or discretionary expense. Typical household fixed expenses are mortgage or rent payments, car payments, real estate taxes and insurance premiums.

Answer 2

I won’t address rent because the occupant has far less control over that. Let’s start with a basic scenario where you are renting and have your own electric & gas services, meaning that each has its own meter and is serving only your home unit. This will allow the information to apply whether you have only electric, electric and gas from one company, or electric & gas from two different companies or municipalities. We’ll also assume that there are no anomalies like hot water leaks or malfunctioning equipment, no extra visitors or abnormal amounts of time spent at home.

Here is a common claim from a customer for an energy utility’s call center representative to hear:

“I’m not doing anything different, don’t have any new appliances, and my bill is a lot higher than last month.”

The customer is being honest and accurate. They kept the same thermostat setting, departed and arrived within the same ten-minute timeframe every day, washed & dried their clothes the same day and times as they always have, showered the same amount of times. We are creatures of habit and generally don’t change. So what did change?

The weather.

Two thermostats usually exist in a basic home: One for the heater/central heating/air conditioning, and one for the water heater.

When the temperature outside of the home changes beyond the setting of the thermostat, the heating or cooling will kick on and begin using a commodity – electricity or gas.