1. Fixed & Variable Costs Consumer Math 2012-2013 1

2. Overview Needs vs. Wants Fixed Costs – Examples Variable Costs – Examples Calculating Total Fixed Costs Calculating Total Variable Costs Calculating Total Monthly Bills 2

3. Needs vs. Wants 3 Needs Food Clothing Rent Car Phone Computer Wants TV Phone Jewelry Entertainment

4. Fixed Costs Expenses that stay the same each week or month 1.Rent 2.Insurance 3.Dues 4.Internet/Cable 5.Loan 4

5. Discretionary/Variable Costs Expenses that change each week or month 5 1.Gifts 2.Recreation 3.Clothing 4.Groceries 5.Phone 6.Utilities 7.Haircut 8.Food/Snacks 9.Parties 10.Dating Which variable expenses may not occur every month?

6. Expenses What are two fixed expenses that your family has each month? What are two variable expenses that your family has each month? 6

7. Example Fixed Expenses Cost/Month Rent$1,250 Car Insurance $200 Car Payment$210 Triple Play$100 School Loan$75 iPhone$100 Total:$1,935 7 Variable Expenses Cost/Month Food$600 Clothing$100 Haircut$50 Dates$200 Birthdays$100 Credit Card$800 Gas$180 Total:$2,030 RevenueNet Pay Job 1$2,700 Job 2$500 Total:$3,200