Mastering Budgeting: Needs vs Wants

What is the first step in creating a budget plan?

• Estimate your monthly expenses

• Determine your monthly income

• List down your wants

• Calculate your savings

Which of the following is considered a "need"?

• A new smartphone

• Dining out at restaurants

• Rent or mortgage

• A gym membership

What should you do if your expenses exceed your income?

• Borrow money to cover the difference

• Cut back on your wants

• Increase your needs

• Ignore the problem

Why is it important to differentiate between needs and wants when budgeting?

• To spend more money on wants

• To ensure you can live without needs

• To prioritize spending and savings

• Wants are more important than needs

Which of the following should be included in a budget plan?

• Only fixed expenses

• Only variable expenses

• Both fixed and variable expenses

• Neither fixed nor variable expenses

What is a "want" in terms of budgeting?

• Something that is essential for living

• A luxury or non-essential item

• A fixed expense

• A variable expense

How often should you review and adjust your budget?

• Once a year

• Every month

• Only when you get a raise

• Never

What role does savings play in a budget plan?

• It is not necessary to save

• Savings should be considered a want

• Savings should be treated as an expense

• Savings are only for the wealthy

Which of the following is a smart budgeting practice?

• Spending all your income each month

• Saving a portion of your income for emergencies

• Ignoring debts to prioritize wants

• Only budgeting for needs and ignoring wants completely

What is the benefit of distinguishing between fixed and variable expenses in your budget?

• It helps you to borrow more money

• It allows for more accurate financial planning

• It encourages impulsive spending

• It is only useful for businesses, not individuals