PFR 2.2 Budgeting Basics

What is the definition of income?

• Money spent on necessities

• Money received for work, as a gift, or through investments

• Money saved for future use

• Money given to charity

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

• Groceries

• Rent

• Electricity bill

• Eating out at restaurants

Identify the type of expense: A subscription service that charges the same amount monthly.

• Variable Expense

• Fixed Expense

• Intermittent Expense

• Discretionary Expense

Emma has a babysitting job and receives $160 monthly. She plans to give 10% to charity. How much will she give?

• $10

• $16

• $20

• $25

If Emma wants to save for a car and plans to save 100 each month, how many months will it take her to save 1,200?

• 10 months

• 12 months

• 14 months

• 15 months

Which of the following is a discretionary expense?

• Rent

• Groceries

• Dining out

• Car insurance

Emma's budget includes $20 for clothes and $20 for food. If she spends $25 on clothes, what should she do to stay within her budget?

• Spend $5 less on food

• Increase her budget

• Ignore the overspending

• Spend $5 more on food

Why is it important to categorize expenses in a budget?

• To make the budget look more complex

• To help make better spending decisions

• To increase the number of expenses

• To avoid saving money

What is the first priority in a budget according to the prompt?

• Saving

• Spending

• Giving

• Income