Dave Ramsey - Budgeting

Front

What is a fixed expense?

Back

An expense that remains the same from month to month, such as rent or mortgage payments.

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What is a variable expense?

Back

An expense that can change from month to month, such as groceries or entertainment.

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What is a discretionary expense?

Back

An expense that is not essential and can be adjusted or eliminated, such as dining out or luxury items.

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What is a zero-based budget?

Back

A budgeting method where every dollar is assigned a specific purpose, ensuring that income minus expenses equals zero.

Front

How does a zero-based budget help with spending?

Back

It helps avoid overspending and impulse purchases by allocating every dollar to a specific category.

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What is the envelope system in budgeting?

Back

A budgeting method that uses envelopes to categorize and store cash for planned monthly expenses.

Front

What is the purpose of tracking your account balance?

Back

To ensure you have an accurate understanding of your available funds and to avoid overdrafts.

Front

Which account record typically has the most current balance?

Back

Your own account register, as it reflects real-time transactions.

Front

What is the difference between fixed and variable expenses?

Back

Fixed expenses remain constant each month, while variable expenses fluctuate based on usage or consumption.

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Why is it important to categorize expenses?

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Categorizing expenses helps in understanding spending habits and identifying areas for potential savings.