W!SE Financial Literacy Certification Practice Test 2025 – Your All-in-One Guide to Exam Success!

Grocery costs are classified as a variable expense because they can fluctuate based on consumption patterns and individual choices. Unlike fixed expenses, which remain constant regardless of usage or behavior (like rent payments or insurance premiums), variable expenses change over time. For instance, one month, a person might spend more on groceries due to hosting a gathering, while the next month, they may purchase fewer items. This variability makes grocery costs a clear example of a variable expense, as they can be adjusted based on the buyer's needs and habits.