Unit 12 Study Guide

What is a budget?

• a plan for using income

• an amount that must be paid

• an amount of money that is saved

• a personal promise to pay something

What is the advantage to spending less money than is earned?

• You will have lower bills.

• You never have to worry about money.

• You can save money for future purposes.

• You have to make no spending sacrificies.

A personal budget will MOST LIKELY include which item(s)?

• earnings and bills

• job titles and possible income

• a list of wanted, but not needed items

• a list of all items purchased in the last 12 months

Why might personal saving decisions be important?

• It is more important to spend money than to save it.

• Spending money on unneeded items can save you money.

• Saving money can help you prepare for unexpected expenses.

• Having a savings account can help you find a better-paying job.

Why might a personal budget include information on BOTH spending AND saving habits?

• People need to learn how to spend money instead of saving it.

• By knowing how much they spend, people can look for ways to save more.

• Spending and saving habits cannot be changed, so people have to earn more.

• A personal budget shows people how to spend more money on items they want.

Sharice is planning a personal budget. Which part of her budget will be easiest to change?

• Income

• Savings

• Spending on Wants

• Spending on Needs

A ______ expense is a cost that does not change over a time period.

• fixed

• variable

• flexible

• discretionary

A ________ expense is a cost that may happen each month, but one who's total amount may change from month to month.

• fixed

• variable

• flexible

• discretionary

The first step in creating a budget is

• getting a bank account.

• cutting back on expenses.

• knowing what your income is.

• listing all of your expenses.

What is a MAJOR difference between a credit card and a debit card?

• Debit cards draw money from your checking account and credit cards borrow money

• Debit cards have a higher interest rate than credit cards

• Credit cards must be paid off monthly, debit cards do not

• Credit cards draw directly from your savings account if they're not payed off monthly