What does a budget show you?

How much money you plan to come in and go out during the month

How much money you need to earn

How much money you spent last month

Why is tracking your expenses throughout the month important?

It gives you insight into whether you're sticking to the budget you set.

It allows you to delete categories you don't like.

It helps you pull money from your savings to spend in other categories.

It really isn't that important in the long run.

What kind of money counts as income?

All money that you receive, including money from your job and gifts like birthday money

Only the money you make at your job

Only money deposited into your bank account

What is a way to stay accountable to reaching your financial goals?

Finding a person you trust to help keep you on track with your money goals

Hiring a financial advisor to make your decisions about money for you

Looking at the budget you set at the end of the month

Creating specific categories in your budget

A common misconception is that budgeting will keep you from having fun, when in reality a budget . . .

Means there are no rules—you are free to use your money however you want

When is the right time to start creating and living by a budget?

Right now - it's never too early!

When you start researching colleges and the costs that come along with it

Once you have a job with an income

When you decide it's time to buy a car

What should you do if you overspend in one category of your budget?

Adjust your budget by removing money from other spending categories.

Just leave it. It will probably work out fine.

Take money from the Giving category. You're giving to yourself!

Ask a friend for the money you overspent.

What is a good way to make sure you're creating a budget that's realistic?

Check your calendar so you can plan for upcoming monthly expenses.

Make sure you create a budget every single day.

Make sure your budget is perfect before starting. If it isn't just right, don't use it.

Make sure you have enough money in your savings account to pull from if you overspend.

The best way to budget is...

The way that works best for you

What is the envelope system?

It's a method of budgeting that uses envelopes labeled with specific budget categories for your cash.

It's a systematic approach to budgeting with a digital app that organizes categories based on qualitative amounts.

It's a way to budget that involves putting a credit card in each envelope to use for that category.

It's a system that involves writing your entire budget on an envelope.

Why is budgeting so important?

It gives you control of your money and sets you up for financial success in the future.

It's a good way to make sure all your money is spent by the end of the month.

It helps you figure out the best way to justify purchases that maybe aren't necessary.

It helps you brush up on your math skills.

What is the key principle of a zero-based budget?

You allocate every dollar of income to specific expenses, savings, or debt, with the goal of having zero unallocated funds at the end

You start with the previous year's budget and adjust based on new expenses

You allocate funds based on your highest-priority expenses first and only budget for what remains

You set aside a fixed percentage of your income for giving, saving, and investing

Chapter 2 Budgeting Basics

Authored by Roy Matthews

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32 questions

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MULTIPLE CHOICE QUESTION

30 sec • 3 pts

Although the majority of Americans think budgeting is important, about of Americans actually use a budget.

75%

50%

23%

35%

MULTIPLE CHOICE QUESTION

30 sec • 3 pts

Which of the following is NOT a component of a budget?

Credit score

Saving

Income

Giving

MULTIPLE CHOICE QUESTION

30 sec • 3 pts

Online budgeting apps are more effective than budgeting with pen and paper.

True

False

MULTIPLE CHOICE QUESTION

30 sec • 3 pts

What are the Four Walls?

Utilities, college fund, restaurants, and car insurance

Cell phone bill, car insurance, shelter, and money for the movies

Food, utilities, transportation, and college fund

Food, utilities, shelter, and transportation

MULTIPLE CHOICE QUESTION

30 sec • 3 pts

How many categories should you have in your budget?

15 or more

No limit; use as many as you need to keep your budget accurate!

No more than 10

At least 3

MULTIPLE CHOICE QUESTION

30 sec • 3 pts

How often should you create a budget?

Daily

Weekly

Monthly

Biannually

MULTIPLE CHOICE QUESTION

30 sec • 3 pts

If you get married, only one person is responsible for budgeting.

True

False

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Chapter 2 Budgeting Basics

Although the majority of Americans think budgeting is important, about of Americans actually use a budget.

Which of the following is NOT a component of a budget?

Online budgeting apps are more effective than budgeting with pen and paper.

What are the Four Walls?

How many categories should you have in your budget?

How often should you create a budget?

If you get married, only one person is responsible for budgeting.

What does a budget show you?

Detailed categories on your budget will help you make better spending decisions.

A budget says what will happen with your money, while a cash-flow statement shows what already happened.

Access all questions and much more by creating a free account

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