Personal Finance - Chapter 2 Test
List the 4 components of a budget
income, giving, saving, spending
Your ______, _______, and _______ can also have categories
income, savings, and giving
Make sure you have a ______ category
miscellaneous
you need to do a budget every single _______
month
definition of intermittent expense
occurs at various times throughout the year and tends to be in large, lump sums
a budget is never going to be a _____ process
perfect
Bible verse from Proverbs 27:23
"be diligent to know the state of your flocks and attend to your herds."
Bible verse from Proverbs 21:5
"the plans of the diligent lead to profit as surely as haste leads to poverty."
Bible verse from the book of Luke
"who intending to build a tower does not first count the cost?" Luke 14
What percentage of people budget every month?
35%
a zero based budget is when your income minus your giving, saving, and spending equals...
zero
4 steps to the envelop system
1. write name of category on envelop 2. put cash in for that category 3. spend from that envelop for that category 4. no more spending for that category once cash is gone
it takes _ _____ to get a working budget
3 months
What percentage of people agree that budgeting is important?
95%
Why do a lot of people choose not to budget?
They think it will keep them from having fun with their money.
Quote to memorize about zero-based budgets
a zero-based budget is giving every dollar a name on paper, on purpose, before the month begins
Keeping track of your expenses will help you _____ your budget
adjust
once you have no debt other than a mortgage, you should...
budget 15% of your gross income to invest for retirement
when you use ____ you end up spending less
cash
The way your break up your _________ is up to you. (talking about budget)
categories
Every month is going to be ________.
different
the first month you do your budget will be a _________ and that's okay
disaster
one of the best ways to track your expenses is the ______ system
envelope
definition of a discretionary (nonessential) expense
expense for things you don't need
definition of a fixed expense
expense that remains the same from month to month
definition of a variable expense
expense that varies from month to month, but you can expect to have every month
When budgeting becomes a habit in your life, it will become easier and ______.
faster
Rent is an expense that you pay once a month, and it's the same every month. That makes it a ____ expense
fixed
List the 4 walls
food, clothing/transportation, utilities, shelter
Your budget gives you ________ to spend
freedom
Ask a parent or a ______ to help keep you accountable
friend
find creative ways to be ________ with your time and money
generous
Money flows out in three ways. List them in the correct order
giving, saving, and spending
Be _____ with yourself about your spender or saver tendencies
honest
What is your budget a plan for?
how to spend your money
Money flows in 2 ways. List them
in and out
You will be inclined to budget one way or another based on your money _________
personality
A budget is a ____ for your money
plan
Don't underestimate the emotional _____ you get when using cash
punch
_____ your budget with someone you trust
share
What is gross income
the amount you earn before taxes and other payroll deductions
give your budget _______ months to start working
three
after you make a budget, you need to _______ every expense
track
definition of net income
what a person earns after payroll taxes and other deductions are taken out; often referred to as take home pay
use a budget app that works for ___
you.
What is your biggest wealth building tool?
your incom
a zero-based budget does NOT mean...
zero dollars in your checking account
