Budgeting Unit Test Review

What does it mean to budget?

• making sure your previous month's accounts are balanced

• managing limited resources to meet needs & achieve goals

• adding up all of your income for a calendar year

• to create financial goals

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

• review and adjust your expenses

• categorize your budget inputs

• divide your expenses into fixed vs variable

• identify all income and expenses

• determine how much to save each month

Which of the following is NOT true about budgeting?

• It can help you meet your financial goals

• It helps you see where your money is going

• It is primarily necessary for people with large income.

• It takes minimal time and basic math skills to maintain.

Fixed expenses are...

• expenses that remain the same amount each month

• expenses that change from month to month

• expenses that are necessary for survival

• expenses that include non-essential items or activities that bring enjoyment

Variable expenses are...

• expenses that remain the same amount each month

• expenses that change from month to month

• expenses that are necessary for survival

• expenses that include non-essential items or activities that bring enjoyment

discretionary expenses are...

• expenses that remain the same amount each month

• expenses that change from month to month

• expenses that are necessary for survival

• expenses that include non-essential items or activities that bring enjoyment

another way to say "non-discretionary expense" is

• necessary expense

• fixed expense

• variable expense

• unexpected expense

• long-term expense

in budgeting, which of the following is a primary benefit of categorizing expenses as fixed or variable?

• It allows for accurate forecasting of future expenses

• It ensures equal allocation of funds

• It helps determine the total income

• it provided stability in time of crisis

• it allows you to accurately forecast the amount of taxes you will pay

Money earned before any deductions or taxes are taken out.

• gross income

• net income

• pay stub

• non-taxable income

• discretionary income

Choose the example(s) of a short-term goal?

• to pay off a $700 credit card balance

• to save for retirement

• to save $15,000 for the down payment on a house

• save for a vacation to the mountains next year