Budgeting Essentials Review

What does the acronym SMART stand for in financial goal setting?

• Specific, Measurable, Action-oriented, Realistic, Time-bound

• Simple, Manageable, Achievable, Relevant, Timely

• Strategic, Measurable, Attainable, Relevant, Timed

• Specific, Measurable, Attainable, Reliable, Timely

Which type of goal is typically set for a duration of less than 3 months?

• Intermediate goal

• Annual goal

• Long-term goal

• Short-term goal

What is a primary component of a budget?

• Luxuries

• Debts

• Savings

• Investments

What should be the first type of expense you plan for in your budget?

• Groceries

• Entertainment

• Savings

• Clothing

What type of expense remains constant each month?

• Variable expense

• Periodic expense

• Fixed expense

• Flexible expense

What should you do if your expenses exceed your income?

• Borrow more money

• Increase your expenses further

• Adjust your budget to balance

• Ignore the deficit

What does it mean to have a balanced budget?

• You have no debts

• You are saving more than spending

• Income and expenses are equal

• Expenses are more than income

What is a budget surplus?

• When expenses are greater than income

• When income is greater than expenses

• When income equals expenses

• When you have no expenses

What is one way to handle a budget deficit?

• Spend more on luxuries

• Ignore the deficit

• Reduce variable expenses

• Increase fixed expenses

Which strategy is NOT effective for managing a budget deficit?

• Increasing income

• Taking on more debt

• Cutting unnecessary spending

• Reducing expenses