Correct Response: C. After determining their monthly income, the next step is for the couple to determine what expenses are relatively constant, or fixed, each month. Fixed expense are expenses that do not change from month to month and include items such as rent, health insurance, loan payments, etc. Subtracting the fixed expenses from the net income results in the amount of money available for items such as food, clothing, entertainment, and savings. Optional expenditures such as home furnishings, entertainment, and personal allowances can only be determined after the couple knows how much money is available (A). A couple cannot determine how much to put aside for saving each month until they have determined their household income less monthly fixed expenses (B). Assessing the value of assets will not increase their discretionary income unless they were to sell some of their assets (D).
