Personal Finance 12th Chapter 2 Study Guide
(True/False) A budget is only just for adults with full-time jobs.
(False) It's for you too
What are the Four Walls?
- 1. Food - 2. Utilities - 3. Shelter - 4. Transportation
What are the Five Foundations?
- 1. Save a $500 emergency fund - 2. Get out and stay out of debt - 3. Pay cash for your car - 4. Pay cash for college - 5. Build wealth and give
What is the Difference between a Budget and a Cash-Flow Statement?
- A Budget tells you what WILL happen with your money - A Cash-Flow Statement tells you what HAS ALREADY happened with your money
What is a Zero-Based Budget?
- A cash-flow plan that assigns an expense to every dollar of your income - The goal is for the total income minus the total expense to equal zero
What is the Envelope System?
- A system where you use cash for categories you tend to overspend on - Each categories amount of cash goes into an envelope, when the amount in the envelope is used, no more spending
What are Discretionary (Nonessential) Expenses?
- Expenses for things you don't need - These can be fixed, variable, or intermittent - Ex. Eating out at Restaurants (Variable) - Ex. Online gaming subscription (Fixed)
What are Intermittent Expenses?
- Expenses that occur at various times throughout the year and tend to be in large, lump sums - Ex. Yearly Yearbook (duh); Car insurance
What are Fixed Expenses?
- Expenses that remain the same from month to month - Ex. Rent
What are Variable Expenses?
- Expenses that varies in dollar amount from month to month but that you can expect to have every month - Ex. Electric Bill; Gas; Groceries
Describe the Second Basic Part of a Budget?
- Giving is the second priority - Where you decide how you'll be generous with the money you have
Describe the First Basic Part of a Budget?
- Income is any money you earn or receive as a gift - Paycheck - Birthday Money
Simply BLANKING you should budget is very different from BLANKING a budget.
- Knowing - Doing
What are the two types of money personalities?
- Saver - Spender
Describe the Third Basic Part of a Budget?
- Saving is the third priority - Where you set aside money for your saving goals
Describe the Fourth Basic Part of a Budget?
- Spending is the last priority - Where and how you spend your money
What is Net Income?
- What a person earns after payroll taxes and other deductions are taken out - Often referred to as take-home pay
What are the Four Basic Parts of a Budget?
1. Income 2. Giving 3. Saving 4. Spending
What percent should be giving?
10%
What percent of Americans are without debt and say that they never worry about their finances?
33% of Americans
Only BLANK of people do a budget every month.
35%
What percent of Americans say their personal debt level creates stress and makes them anxious?
46% of Americans
What is a Cash-Flow Statement?
A record that summarizes all of the income and outgo (spending) over a certain time period
What is a Budget?
A written plan for giving, saving, and spending
Keeping track of your expenses will help you BLANK your budget.
Adjust
The way you break up your BLANK is up to you.
Categories
Make sure you have a miscellaneous BLANK.
Category
A zero-based budget does not mean zero dollars in your BLANK account.
Checking
Every month is going to be BLANK.
Different
What is Commission?
Earnings based on a percentage of the sales made
One of the best ways to track your expenses is the BLANK system.
Envelope
When budgeting becomes a habit in your life, it will become easier and BLANK.
Faster
Money BLANK in two ways: in and out.
Flows
What is the First Wall?
Food
Prioritize your BLANK: Shelter, utilities, transportation, and food.
Four Walls
Your budget gives you BLANK to spend.
Freedom
Ask a parent or find a BLANK to help keep you accountable.
Friend
The Second component of a budget is BLANK.
Giving
Your income, savings, and BLANK can also have categories.
Giving
Be BLANK with yourself about your spender or saver tendencies.
Honest
95% of people agree that budgeting is BLANK.
Important
The First component of a budget is BLANK.
Income
What is an Irregular Income?
Income that comes in at different amounts or at different times, or both
What is Income?
Money received for work, as a gift, or through investments
You need to do a budget every single BLANK.
Month
A budget is never going to be a BLANK process.
Perfect
You will be inclined to budget one way or another way based on your money BLANK.
Personality
A budget is a BLANK for your money.
Plan
Don't underestimate the emotional BLANK you get when using cash.
Punch
What is the First Foundation?
Save a $500 emergency fund
The Third component of a budget is BLANK.
Saving
BLANK your budget with someone you trust.
Share
What is the Third Wall?
Shelter
Money Flows out through giving, saving, and BLANK.
Spending
The Fourth component of a budget is BLANK.
Spending
What is Gross Income?
The amount you earn before taxes and other payroll deductions
The first month you do your budget will be a BLANK, and that's okay.
Three
After you make a budget, you need to BLANK every expense.
Track
What is the Fourth Wall?
Transportation
What is the Second Wall?
Utilities
Use a budgeting app that works for BLANK.
You
A zero-based budget is when your income minus your giving, saving, and spending equals BLANK.
Zero
The best kind of budget is a BLANK budget.
Zero-Based
