Expenses refer to the money you need to pay for goods and services that you buy or use.

There are 2 types of expenses:

  • Essential expenses take care of your needs, like mortgage or rent, utilities, groceries, etc.
  • Discretionary expenses cover your wants, like eating out, going to the movies, and vacations.

For more information, please visit: What are Income and Expenses? Extremely Simple Definitions for Kids

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