TEST - Understanding Budgeting and Proportions

Front

What is a proportion?

Back

A relationship between two ratios.

Front

How do fixed and recurring expenses affect a monthly budget?

Back

They are predictable and help in planning.

Front

What does the envelope budget strategy involve?

Back

Allocating cash for different spending categories into envelopes.

Front

What is net pay?

Back

Take-home pay after deductions.

Front

In the 50/30/20 budget strategy, what does the 30% represent?

Back

Wants.

Front

What are fixed expenses?

Back

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

Front

What are variable expenses?

Back

Costs that can fluctuate, such as groceries or entertainment.

Front

What is the purpose of a budget?

Back

To plan and control spending to achieve financial goals.

Front

What is the 50/30/20 rule?

Back

A budgeting guideline that suggests allocating 50% to needs, 30% to wants, and 20% to savings.

Front

What is a budget surplus?

Back

When income exceeds expenses.