personal finance - chpt. 2

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Although the majority of Americans think budgeting is important, about ______ of Americans actually use a budget.

35%

What kind of money counts as income?

All money that you receive, including money from your job and gifts like birthday money

Your money personality can affect your _____.

Attitude toward budgeting

What are examples of irregular income

Birthday money, commission-based jobs

Which of the following is NOT a component of a budget?

Credit Score

Going to the movies is an example of what types of expenses?

Discretionary and variable

If you get married, only one person is responsible for budgeting.

False

If you have an irregular income, budgeting won't work for you.

False

Your monthly rent payment is an example of a variable expense.

False

What is a way to stay accountable to reaching your financial goals?

Finding a person you trust to help keep you on track with your money goals

What is the difference between a fixed expense and a variable expense?

Fixed - stays the same every month Variable - pay for it every month, but it changes

What are the Four Walls?

Food, utilities, shelter, and transportation

What is a good way to make sure you're creating a budget that's realistic?

Make sure you have enough money in your savings account to pull from if you overspend.

Describe irregular income

Money that is coming in but not at a regular amount

How often should you create a budget?

Monthly

Example of fixed expenses

Rent, car payments

When is the right time to start creating and living by a budget?

Right now - it's never too early!

The best way to budget is...

The way that works best for you

What priority are the Four Walls in your budget?

They are the four things you need to survive

Detailed categories on your budget will help you make better spending decisions.

True

Net income is the amount you get paid before taxes.

True

Online budgeting apps are more effective than budgeting with pen and paper.

True

Example of variable expenses

gas bill, heat bill

What should you do if you overspend in one category of your budget?

Adjust your budget by removing money from other spending categories.

A common misconception is that budgeting will keep you from having fun, when in reality a budget...

Gives you permission to spend

The first priority in your budget should be _____.

Giving

What does a budget show you?

How much money you plan to come in and go out during the month

Why is budgeting so important?

It gives you control of your money and sets you up for financial success in the future.

Why is tracking your expenses throughout the month important?

It gives you insight into whether you're sticking to the budget you set.

What is the envelope system?

It's a method of budgeting that uses envelopes labeled with specific budget categories for your cash.

How many categories should you have in your budget?

No limit; use as many as you need to keep your budget accurate!

Research shows that nearly half of Americans (46%) feel stress and anxiety about the amount of _______ they have.

Personal debt

How many months does it usually take for your budget to start working as a budget should?

Three

Commission is when you make money based on the percentage of _____.

Total sales

What are some key components of successful budgeting?

Track your spending, create a budget, find a system that works for you

A budget says what will happen with your money, while a cash-flow statement shows what already happened.

True

The primary reason people don't budget is because they lack the behavior to stick to a budget.

True

What makes a budget a zero-based budget?

When you have budgeted for every dollar to be in a category


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