ACTIVITY
Use the following chart to list any appropriate items you can think of in each category
Necessities
Luxuries
The money spent on necessities are usually “fixed cost” items while the money spent on
luxuries can be flexible according to income. For example, your rent will generally stay
the same from month to month although it is possible for the landlord to raise your rent.
Therefore, you will always require the same amount of income. On the other hand, the
number of times you can go to the movies in one month or buy new CD’s depends upon
how much money you have left after paying for all your necessities.