ITB & FL. Midterm Review #1. SY 22/23

It is important to create and follow a budget in order to manage your money effectively.

• True

• False

A deduction is an expense that is subtracted from your gross income to calculate your taxable income.

• True

• False

Career planning refers to the strategy a person uses to determine career goals and the path to achieve those goals.

• True

• False

Career planning starts with-

• assessing your skills and talents
• deciding how much you want to earn
• determining the hours you work
• listing your past jobs

The Internal Revenue Service (IRS) is the federal agency responsible for collecting taxes and enforcing tax laws in the United States.

• True

• False

What does it mean to budget?

• reevaluating your savings account yearly

• an estimate of income and expenses for a set period of time

• adding up all of your income

• your financial goals

What is the first step you should take when planning your budget?

• reviewing and adjusting your expenses

• add up all of your income

• divide your expenses into fixed vs variable

• gather all financial statements

Fixed expenses are...

• costs that are necessary and stay the same amount each month

• costs that are necessary, but the amount that you spend differs from month-to-month

• costs that are easily changed, reduced, or eliminated.

• income not spent, but rather putting money aside for big purchases, emergencies, the future, etc.

What is a variable expense?

• costs that are easily changed, reduced, or eliminated

• costs that are necessary and stay the same amount each month

• income not spent, but rather putting money aside for big purchases, emergencies, the future, etc.

• costs that are necessary, but the amount that you spend differs from month-to-month

A cellphone bill is a 

• variable expense 
• fixed expense