Budgeting Worksheet I

What is gross pay?

• The total amount of money an employee earns before deductions

• The amount of money after taxes are deducted

• The amount received after retirement contributions

• The net income after all expenses

Which of the following is NOT typically deducted from gross pay to calculate net pay?

• Federal, state, and local income taxes

• Social Security and Medicare taxes

• Gross wages

• Union dues

What is another term for net pay?

• Gross wages

• Take-home pay

• Total earnings

• Pre-tax income

Which factor can significantly impact gross wages versus net wages?

• The employee's job title

• The location of the employer

• The employee's age

• The type of industry

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

• Mortgage

• Rent

• Utilities

• Insurance

What is disposable income?

• Money spent on fixed expenses

• Money spent on flexible expenses

• Combined amount of fixed and flexible spending

• Money left over after you pay mandatory payments

What should you add back to your income to get a true picture of your savings and expenditures?

• 401(k), savings, and health and life insurance

• Only 401(k)

• Only savings

• Only health and life insurance

What is a budgeting system?

• A framework for how you budget

• A way to increase your income

• A method to reduce taxes

• A plan to eliminate expenses

What is one method suggested for tracking your financial progress?

• Ignoring your spending habits

• Using online budgeting and savings tools

• Spending more on luxury items

• Avoiding any form of budgeting

Why is it important to automate your savings?

• To increase spending on entertainment

• To ensure money is allocated with minimal effort

• To avoid saving money altogether

• To complicate the budgeting process