3.2 The Importance of a Zero-Based Budget

You should make a budget _______ the month begins

• after

• before

• right in the middle

• never

Zero-Based Budget means that:

• you have no money

• every dollar is assigned to a specific purpose

• you spend more than you make

• invest all of your money

Zero-Based Budget:

• Go into debt

• Income - Outgo = Exactly zero

• Obtain large amounts of cash

• Become Dave Ramsey

Envelope System:

• Dig a hole in the ground and bury all you belongings

• Know how much you spend on each specific category and place that amount in an envelope

• Put all the money you make into one envelope

• Spend all the money you have on a car

True/False: Once you spend all the money in a specific envelope, you can borrow some from a different envelope

• True

• False

Which of the following is not a step to help you budget?

• Write it down

• Go into debt

• Stay away from spending temptations

• Use the envelope system

Just give every dollar a _______ on paper.

• Voice

• Name

• Job

• Signature

True/False: More than 50% of parents that give their children allowance make them deposit that amount of money into a bank account

• True

• False

What is a budget?

• Spending all of you money on one item

• A plan on how you are going to spend that money before you actually spend it

• A device that allows you to create money

• System in which you pay extra for everything

When should you get into a habit of creating budgets every month?

• Day before the end of each month

• Now

• In 5 days

• Never