Budgeting Quiz
What should and should not be included when estimating your income?
All sources of income should be recorded. Do not include estimated bonuses or gifts.
What are some characteristics of a good budget?
Based on short and long term goals. Balance short term spending by long term success. Saving now will help you meet your goals later.
What is a variable expense? What are some examples?
Variable expenses are expenses that change from month to month. Examples are groceries, medical bills, gas, and clothes.
What are the 7 steps to planning a budget?
1.Set financial goals 2.Estimate your income 3.Budget for unexpected expenses 4.Budget for fixed expenses 5.Budget for variable expenses 6.Record what you spend 7.Review your spending and saving patterns
A budget can be best described as what?
A budget is a plan for dividing income among saving and spending options.
What is a fixed expense? What are some examples?
A fixed expense does not change from month to month. Examples are mortgage, taxes, car and student loans.
Why is it important to prioritize and rank your goals when you create a budget?
Help you be more organized when it comes to your documents. This is important because it will help you determine your financial status, pay bills on time, plan for the future, and make good financial decisions.
How can you keep accurate records of your budget?
Keep them up to date and make changes based on your income and expenses. You can keep track on paper, an app, or a website.
How often should you examine and revise your budget?
You should monitor your budget at least once a month. You should revise your budget if you fall behind and fix areas you are overspending in.
If you want to cut your expenses should you start with fixed expenses? Why or why not?
You should not start with fixed expenses. They do not change from month to month. They are important things like mortgage, taxes, car and student loans. Instead you should change your variable expenses that change from month to month and aren't as important.
