personal finance - chpt. 2
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