Financial Literacy Practice

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What is monthly income?

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Monthly income is the total amount of money earned by an individual or family in one month, before any deductions or expenses.

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How do you calculate 6% of a salary?

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To calculate 6% of a salary, multiply the salary by 0.06. For example, for a salary of $3,200, the calculation is $3,200 x 0.06 = $192.

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What are fixed expenses?

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Fixed expenses are costs that do not change from month to month, such as rent or car payments.

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What are variable expenses?

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Variable expenses are costs that can change each month, such as groceries or entertainment.

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How do you calculate 3% of a salary?

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To calculate 3% of a salary, multiply the salary by 0.03. For example, for a salary of $3,200, the calculation is $3,200 x 0.03 = $96.

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What is a budget?

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A budget is a plan that outlines expected income and expenses over a specific period, helping individuals manage their finances.

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What are miscellaneous expenses?

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Miscellaneous expenses are small, often unpredictable costs that do not fit into other budget categories, such as gifts or unexpected repairs.

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How do you determine how much to spend on rent?

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A common guideline is to spend no more than 30% of your monthly income on rent. For example, if your income is $4,500, you should aim to spend $1,350 or less on rent.

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What is Social Security tax?

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Social Security tax is a federal tax that funds the Social Security program, which provides benefits to retirees and disabled individuals.

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What is Medicare tax?

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Medicare tax is a federal tax that funds the Medicare program, which provides health insurance for individuals aged 65 and older and some younger people with disabilities.