Understanding Budgeting and Expenses

What is a budget?

• A list of things you want to buy.

• A spending plan based on income and expenses.

• A record of money you owe to others.

• A way to track only your earnings.

What is the primary benefit of making a budget?

• It helps you spend more money.

• It guarantees you will become rich.

• It creates financial stability by tracking spending and saving.

• It allows you to avoid paying bills.

What is debt?

• Money you earn from a job.

• Money you receive as a gift.

• Money you borrow from someone that must be repaid.

• Money you save for future purchases.

What is the first step in creating a budget?

• Figuring out how much money you will spend.

• Estimating unforeseen changes.

• Determining how much money you expect to earn or receive as gifts.

• Deciding what items you want to buy.

What is another term for the money you expect to earn or receive as gifts?

• Expenses

• Debt

• Income

• Savings

What are the two main types of expenses mentioned in the video?

• Needs and wants

• Earnings and gifts

• Fixed and variable

• Loans and savings

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

• A new video game

• A baseball glove

• School lunch

• A pair of pants

What is a characteristic of variable expenses?

• They are always the same amount.

• They are easy to plan for.

• They vary or change.

• They are only for essential needs.

What is the purpose of saving for contingencies?

• To buy more wants.

• To pay off existing debt.

• To cover unforeseen changes or unexpected expenses.

• To increase your monthly income.

If Franky's total monthly income is $70 and her total expenses (including a contingency) are $60, how much money does she have remaining?

• $5

• $10

• $15

• $20