Personal Budgets

Front

What is a personal budget?

Back

A personal budget is a plan that outlines how an individual will allocate their income to various expenses, savings, and investments over a specific period.

Front

What percentage of Ryan's take-home pay does he save for retirement?

Back

10%.

Front

If Ryan's take-home pay is $2,500, how much does he save for retirement each month?

Back

$250.

Front

What is a fixed expense?

Back

A fixed expense is a cost that remains the same each month and cannot easily be changed, such as rent or mortgage payments.

Front

What is a variable expense?

Back

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

Front

How do you calculate the percentage of income allocated to entertainment?

Back

Subtract the percentage saved and the percentage for fixed expenses from 100%.

Front

What is the formula to find the total amount saved from income?

Back

Total Savings = Total Income x Savings Percentage.

Front

What does it mean to allocate funds in a budget?

Back

To allocate funds means to assign specific amounts of money to different categories of expenses, savings, or investments.

Front

What is the importance of having a personal budget?

Back

A personal budget helps individuals manage their finances, track spending, save for goals, and avoid debt.

Front

What is discretionary spending?

Back

Discretionary spending refers to non-essential expenses that can be adjusted or eliminated, such as dining out or entertainment.