What is a Variable Committed Expense?
Variable committed expenses are necessary costs above and beyond the standard and usual, but has a high probability of occurring from time to time. This temporary and periodic cost increase usually will spike for a short term, then return to the usual limit. Many household and corporate budgets make allowances for at least some incidents of variable committed expense, so that the budget is not undermined when a variable periodic cost takes place. One of the easiest ways to gain an understanding of a variable committed expense is to think in terms of household expenses that are absolutely necessary, but may vary from one billing period to the next. Household utilities are an excellent example. Many households experience an increase in the water bill during the summer months, owing to the consumption of more water for pools and other types of recreational toys for the children. Because water is considered a necessity, there is no way to avoid the increase above and beyond the usual cost.
