Budget Basics

Front

Michael is planning to put away money for future use or emergencies. What is this practice called?

Back

Saving

Answer explanation

The practice of putting away money for future use or emergencies is called saving. Unlike investing, which aims for growth, saving focuses on setting aside funds for security and immediate needs.

Front

Abigail is planning her finances and needs to create an estimate of her income and expenses for the next month. What is this estimate called?

Back

Budget

Answer explanation

The estimate of income and expenses for the next month is called a 'Budget'. It helps Abigail plan her finances effectively by outlining expected revenues and costs.

Front

Jackson has a set of monthly expenses that do NOT change (same amount every time). What are these expenses called?

Back

Fixed Expenses

Answer explanation

Jackson's monthly expenses that do not change are called Fixed Expenses. Unlike Variable Expenses, which fluctuate, Fixed Expenses remain constant each month, making them predictable and easier to budget.

Front

What type of expenses change every month, like grocery bills and utility costs?

Back

Variable Expenses

Answer explanation

William's grocery bills and utility costs vary each month, making them variable expenses. Unlike fixed expenses, which remain constant, variable expenses fluctuate based on usage and consumption.

Front

Benjamin has regular payments like rent, mortgage payment, or car payment. What are these examples of?

Back

Fixed Expenses

Answer explanation

Benjamin's regular payments like rent and mortgage are examples of Fixed Expenses, as they are consistent and predictable costs that do not change month to month.

Front

Samuel finds himself in a situation where he has more expenses (bills) than he has income (money coming in). What is this situation called?

Back

Budget Deficit

Answer explanation

Samuel's situation, where expenses exceed income, is called a Budget Deficit. This term specifically refers to the shortfall when spending surpasses earnings.

Front

Is creating a budget a helpful tool for managing monthly expenses?

Back

True

Answer explanation

True. Creating a budget helps Ethan track his income and expenses, allowing him to manage his finances effectively and make informed spending decisions.

Front

Mason is trying to manage his finances better. He wants to create a ___________ to help him understand his earnings and expenses.

Back

a plan for managing your money. It compares how much you earn (make) to how much you spend

Answer explanation

The correct choice is 'a plan for managing your money. It compares how much you earn (make) to how much you spend' because Mason wants to understand his finances, which requires a budget or financial plan.

Front

Aria is planning her monthly expenses. The goal of her budget is _________________.

Back

to spend less than she makes

Answer explanation

Aria's budget goal should be to spend less than she makes. This ensures she can save money and avoid debt, which is essential for financial stability.

Front

Grace receives a paycheck every month for her work. Is this paycheck considered her income?

Back

True

Answer explanation

Yes, Grace's paycheck is considered her income because it is the money she earns from her work each month. Therefore, the correct answer is True.