personal finance chapter 2: budgeting

gives you permission to spend

A budget doesn't tell you not to spend. A budget actually

true

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

Gives you permission to spend

A common misconception is that budgeting will keep you from having fun, when in reality a budget... 1. Gives you permission to spend 2. Restricts your fun completely 3. Adds more stress to your life 4. Means there are no rules—you are free to use your money however you want

fixed expense

A(n) _________________ stays the same from month to month.

zero based budget

A(n) _______________should account for fixed, variable, intermittent, and discretionary expenses based on income.

Discretionary Expense

A_____________needs to be evaluated in light of your other expenses for the month.

35%

Although the majority of Americans think budgeting is important, about______ of Americans actually use a budget. 1. 75% 2. 50% 3. 23% 4. 35%

Total sales

Commission is when you make money based on the percentage of _____. 1. Items sold 2. Budgets 3. Investments 4. Total sales

true

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

Discretionary and variable

Going to the movies is an example of what types of expenses? 1. Intermittent and fixed 2. Discretionary and fixed 3. Discretionary and variable 4. Intermittent and variable

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

How many categories should you have in your budget? 1. 15 or more 2. No more than 10 3. At least 3 4. No limit; use as many as you need to keep your budget accurate!

Three

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

monthly

How often should you create a budget? 1. Daily 2. Weekly 3. Monthly 4. Biannually

More grateful

If you approach money with a generous spirit, you'll be: 1. Able to save 2. Less content 3. More grateful 4. Free of stress

false

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

False

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

false

Net income is the amount you get paid before taxes. True False

false

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

personal debt

Research shows that nearly half of Americans (46%) feel stress and anxiety about the amount of _______ they have. 1. Personal debt 2. Categories in their budget 3. Debit cards 4. Money

priotize what is important to you

Specific categories are important to consider when creating a budget so you can

net income

Taxes and with holdings impact your______________, which is the amount of money you take home on your paycheck.

The way that works for you

The best way to budget is... 1. On paper 2. The way that works best for you 3. Creating a spreadsheet 4. By using a digital app

variable expense

The cost of groceries and gas is considered a(n)___________

food, gas, entertainment, shopping

The envelope system is especially helpful for expenses like____

Giving

The first priority in your budget should be _____. 1. Investing 2. Saving 3. Spending 4. Giving

True

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

Giving, saving, and spending

The three priorities in your budget, after listing income, are

irregular income

To budget with a(n) ________________________-prioritize expenses from most to least important so your most important expenses are covered first.

Food, utilities, shelter, and transportation

What are the Four Walls? 1. Utilities, college fund, restaurants, and car insurance 2. Cell phone bill, car insurance, shelter, and money for the movies 3. Food, utilities, transportation, and college fund, 4. Food, utilities, shelter, and transportation

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

What does a budget show you? 1. How much money you plan to come in and go out during the month 2. How much you need to save 3. How much money you need to earn 4. How much money you spent last month

Check your calendar so you can plan for upcoming monthly expenses.

What is a good way to make sure you're creating a budget that's realistic? 1. Make sure you have enough money in your savings account to pull from if you overspend. 2. Check your calendar so you can plan for upcoming monthly expenses. 3. Make sure your budget is perfect before starting. If it isn't just right, don't use it. 4. Make sure you create a budget every single day.

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

What is a way to stay accountable to reaching your financial goals? 1. Finding a person you trust to help keep you on track with your money goals 2. Hiring a financial advisor to make your decisions about money for you 3. Looking at the budget you set at the end of the month 4. Creating specific categories in your budget

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

What is the envelope system? 1. It's a method of budgeting that uses envelopes labeled with specific budget categories for your cash. 2. It's a systematic approach to budgeting with a digital app that organizes categories based on qualitative amounts. 3. It's a way to budget that involves putting a credit card in each envelope to use for that category. 4. It's a system that involves writing your entire budget on an envelope.

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

What kind of money counts as income? 1. Only the money you make at your job 2. Money in your savings account 3. All money that you receive, including money from your job and gifts like birthday money 4. Only money deposited into your bank account

Adjust your budget by removing money from other spending categories.

What should you do if you overspend in one category of your budget? 1. Adjust your budget by removing money from other spending categories. 2. Just leave it. It will probably work out fine. 3. Ask a friend for the money you overspent. 4. Take money from the Giving category. You're giving to yourself!

All of these

What will tracking expenses help you do? 1. Stick to a budget 2. Catch errors 3. Make adjustments 4. All of these

a cash flow plan that assigns an expense to every dollar of your income. This is important because it makes the most of every dollar you make. You want your income minus your expenses to equal zero.

What's a zero-based budget, and why is it important?

commision

What's it called when you make money on the percentage of the total sales you make? 1. Irregular income 2. Commission 3. Gross income 4. Overtime

income

What's your biggest wealth-building tool? 1. Income 2. Investments 3. Savings account 4. Inheritance

Right now- its never too early!

When is the right time to start creating and living by a budget? 1. Right now - it's never too early! 2. Once you have a job with an income 3. When you decide it's time to buy a car 4. When you start researching colleges and the costs that come along with it

giving

When you're creating your monthly budget, what's the first priority under "Expenses"? Saving Giving Spending Entertainment

credit score

Which of the following is NOT a component of a budget? 1. Giving 2. Income 3. Saving 4. Credit score

Depreciation

Which of the following is not a type of discretionary expense? 1. Fixed 2. Intermittent 3. Variable 4. Depreciation

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

Why is budgeting so important? 1. It helps you brush up on your math skills. 2. It gives you control of your money and sets you up for financial success in the future. 3. It helps you figure out the best way to justify purchases that maybe aren't necessary. 4. It's a good way to make sure all your money is spent by the end of the month.

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

Why is tracking your expenses throughout the month important? 1. It really isn't that important in the long run. 2. It helps you pull money from your savings to spend in other categories. 3. It gives you insight into whether you're sticking to the budget you set. 4. It allows you to delete categories you don't like.

attitude towards budget

Your money personality can affect your _____. 1. Ability to budget 2. Personal values 3. Choice of bank 4. Attitude toward budgeting

False

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