Budgeting Review

What is the first step in creating a personal budget?

• Create a savings plan.

• Determine income and expenses

• Track spending habits.

• Set financial goals.

Why is it important to track expenses?

• To have less control over finances, overspend, ignore financial goals, and waste money.

• To achieve financial goals, save money, manage finances, and identify overspending.

• To manage and control finances, identify overspending, save money, and achieve financial goals.

• To increase debt, ignore financial goals, overspend, and mismanage finances.

What are some common categories to include in a personal budget?

• education expenses

• travel expenses

• clothing expenses

• housing expenses, transportation expenses, food expenses, utility expenses, healthcare expenses, debt payments, savings, entertainment expenses, and miscellaneous expenses

How can setting financial goals help with budgeting?

• Setting financial goals helps individuals track their expenses and identify areas where they can cut back on spending.

• Setting financial goals allows individuals to better understand their financial situation and make necessary adjustments to their budget.

• Setting financial goals helps individuals develop a long-term financial plan and make strategic decisions about their money.

• Setting financial goals provides direction and motivation for saving and spending, allowing individuals to prioritize expenses and make informed decisions about where to allocate their money.

What is the recommended percentage of income to allocate for savings in a personal budget?

• 30%

• 10%

• 50%

• 20%

What are some strategies to reduce expenses and save money?

• Investing in expensive luxury items, taking frequent vacations, relying on credit cards for purchases

• Creating a budget, cutting unnecessary expenses, shopping smartly, reducing energy usage, and saving on transportation costs.

What is the difference between fixed and variable expenses?

• Fixed expenses are always higher than variable expenses.

• Fixed expenses are only applicable to businesses, while variable expenses are for individuals.

• Fixed expenses remain the same, while variable expenses can change.

• Fixed expenses are one-time payments, while variable expenses are recurring.

How often should you review and adjust your personal budget?

• Never

• Monthly

• Annually

• Weekly

What are some potential consequences of not budgeting and overspending?

• Lack of financial freedom, strained relationships, and limited access to credit.

• Accumulating debt, financial stress, inability to save for emergencies or future goals, and difficulty in achieving financial stability.

• Decreased quality of life, missed opportunities, and increased stress levels.

• Difficulty in obtaining loans, damaged credit score, and limited financial resources.

What are some ways to increase your income?

• Spending more money on luxury items.

• Investing in education, starting a side business, or asking for a raise.