What are expenditures that are essential for survival and functioning referred to as?

The correct choice refers to expenditures that are vital for an individual's survival and daily functioning, commonly described as spending needs. This term encompasses necessary expenses such as food, housing, utilities, healthcare, and transportation—fundamental costs that must be covered to maintain a basic standard of living.

Understanding the concept of spending needs is crucial for effective personal finance management, as it helps individuals prioritize their budget by distinguishing between what is essential for survival and what can be categorized as discretionary spending or luxuries. By focusing on these needs, individuals can ensure that they allocate sufficient resources to cover the essentials before addressing non-essential purchases.

Other terms like luxury expenses pertain to non-essential purchases that improve quality of life but are not necessary for survival, while essential costs could refer to a similar concept but isn't the commonly used phrase for everyday critical expenses. Fixed costs typically imply regular payments that do not change over time, such as rent or mortgage payments, and while they can be necessary expenses, they don't specifically capture the broader definition of essential needs for daily functioning.