How To Build A Budget

What is the purpose of building an emergency savings account?

• To have money for unexpected expenses
• To have money for retirement
• To have money for luxury purchases
• To have money for daily expenses

What is net income?

• The amount of money spent on fixed expenses
• The amount of money saved in a retirement account
• The total amount of money made in a month
• The amount of money left over at the end of the month

What should you do if your net income is higher than your expenses?

• Reduce expenses
• Build an emergency savings account
• Invest in retirement
• Spend more money

What is the role of net income in budgeting?

• To determine how much money can be spent
• To determine how much money is left over
• To track expenses
• To calculate total revenue

What are variable expenses?

• Expenses that are only paid once a year
• Expenses that are not necessary
• Expenses that are the same every month
• Expenses that change every month

What are fixed expenses?

• Expenses that are not necessary
• Expenses that are only paid once a year
• Expenses that change every month
• Expenses that are the same every month

What is the equation for calculating net income?

• Total revenue plus total expenses
• Total revenue minus total expenses
• Total expenses minus total revenue
• Total revenue multiplied by total expenses

What is the first step in creating a budget?

• Building an emergency savings account
• Tracking expenses
• Determining net income
• Investing in retirement

What should you do if your expenses are greater than your net income?

• Increase fixed expenses
• Reduce variable expenses
• Spend more money
• Do nothing

Which of the following is an example of a variable expense?

• Internet bill
• Rent
• Car payment
• Electricity bill