Budgeting Practice

A budget is:

• A bill for electricity

• A sum of money a person earns

• A form like a tax return

• A calculation of income and expenses

An example of an expense is:

• A birthday gift from your grandma

• Money earned from landscaping

• Paying for a new pair of shoes

• Receiving interest in a bank account

Having more income than expenses:

• Allows you to have money left over

• Will make you have to borrow money

• Indicates you are paying too much for housing

• Demonstrates that you need to look for a new job

Bankruptcy occurs when:

• The income is more than the expenses

• The expenses are more than the income

• The income and expenses are exactly equal

• The expenses are very low in amount

An example of income is:

• Paying for car insurance

• Earning cash by driving for Uber

• A purchase of new clothing

• Charging medicine on a credit card

Paying income tax is an example of:

• A budget

• Income

• Expense

Winning money in a lottery is an example of:

• Income

• Expense

• Budget

It is important for people to make budgets so:

• They can make wish lists for holiday shopping

• They spend more money than they have

• They can plan for their financial future

• They can decide which concerts to attend

Why does a person get a loan?

• Income > Expenses

• Expenses > Income

If your friend had more expenses than income, which of the following would you recommend:

• Purchase more personal items

• Get more expensive health insurance

• Continue to make all the same purchases every month

• Get a roommate to share housing costs