Personal Budget

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What is a personal budget?

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A personal budget is a plan that outlines an individual's expected income and expenses over a specific period, helping to manage finances effectively.

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What is a fixed expense?

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A fixed expense is a cost that does not change from month to month, such as rent or loan payments.

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What is a variable expense?

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A variable expense is a cost that can change from month to month, such as groceries or entertainment.

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How do you calculate 15% of a monthly income?

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To calculate 15% of a monthly income, multiply the income by 0.15. For example, for a $5,000 income, 15% is $5,000 x 0.15 = $750.

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What is the purpose of saving for retirement?

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The purpose of saving for retirement is to ensure financial security and stability in later years when one may no longer be working.

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What is the formula to calculate the percentage of expenses in relation to income?

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The formula is: (Total Expenses / Total Income) x 100.

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What is an example of a fixed expense?

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An example of a fixed expense is a monthly mortgage or rent payment.

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What is an example of a variable expense?

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An example of a variable expense is the cost of groceries, which can vary each month.

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What does it mean to have a balanced budget?

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A balanced budget means that total income equals total expenses, with no deficit or surplus.

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What is the significance of tracking expenses?

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Tracking expenses helps individuals understand their spending habits, identify areas to save, and maintain a budget.