fixed expenses
Also called: biaya tetap
Expenses whose amount is relatively the same each month and hard to avoid.
What it means
Fixed expenses are costs whose amount is relatively the same and that come due routinely every month. Examples include debt installments, rent, and monthly subscriptions. These expenses are hard to eliminate in the short term because they are already commitments. In a family budget, fixed expenses are usually paid first before anything else.
Why it matters for families
Fixed expenses determine how much room a family's finances have to maneuver. If their share is too large, the money left for other needs and savings shrinks. The concrete result is that a family comes under pressure when income drops, because fixed commitments still have to be paid. Adding fixed expenses, such as a new installment, should be done carefully.
Example
For example, a vehicle installment of Rp1.5 million, rent of Rp1.2 million, and digital subscriptions of Rp200 thousand total Rp2.9 million per month. This amount is paid at the start of the month. If income is Rp8 million, fixed expenses take up about 36 percent of income.
Common misunderstanding
Many assume fixed expenses cannot be changed. The correction is that some can be renegotiated or stopped at renewal, such as subscriptions that are rarely used.