What is an expense?

• A. Money you earn from work.
• B. A loan payment you make every month.
• C. The amount you owe after borrowing.
• D. Money you spend on something you buy or pay for.

Answer: (D)

An expense is money you spend on something you buy or pay for. It’s what you use your money for when you buy things or pay bills, like groceries, clothes, or a monthly internet bill. Expenses reduce the cash you have on hand and are a normal part of budgeting.

This is different from income, which is money you earn from work or other sources. It’s also different from debt or amounts owed—like a loan payment you make each month, or the total you owe after borrowing—which are related to borrowing and interest, not the everyday spending you do to buy things.