TEST - Understanding Budgeting and Proportions

Front

What are fixed expenses?

Back

Expenses that do not change from month to month, such as rent or mortgage payments.

Front

What are recurring expenses?

Back

Expenses that occur regularly, such as monthly subscriptions or utility bills.

Front

How do fixed and recurring expenses impact a monthly budget?

Back

They are predictable and help in planning.

Front

What is a variable expense?

Back

Expenses that can change from month to month, such as dining out or entertainment.

Front

What is the envelope budgeting strategy?

Back

A method that involves allocating cash for different spending categories into envelopes.

Front

What is the purpose of a budget?

Back

To plan and control spending, ensuring that expenses do not exceed income.

Front

What does the 50/30/20 budget rule suggest?

Back

Allocate 50% of income to needs, 30% to wants, and 20% to savings.

Front

What is a zero-based budget?

Back

A budgeting method where every dollar of income is allocated to expenses, savings, or debt repayment, resulting in a zero balance.

Front

What is a day-to-day expense?

Back

Regular expenses that occur frequently, such as groceries or transportation.

Front

What is the 'pay yourself first' strategy?

Back

A budgeting approach that prioritizes saving by setting aside a portion of income before spending on other expenses.