Budgeting Terms and Names

What is opportunity cost?

• The total amount of money you earn

• The value of the next best alternative you give up

• The cost of everything you buy

• The money you save for the future

Which of the following is an example of opportunity cost?

• Choosing between two favorite TV shows

• Buying new shoes instead of saving for a concert ticket

• Comparing prices at different stores

• Making a list of expenses

Which is an example of a need?

• A) A video game

• B) Designer clothes

• C) Groceries

• D) Movie tickets

Which of the following is an example of a want?

• Rent

• Water bill

• A smartphone upgrade

• Basic food

A budget is best described as:

• A way to calculate income tax

• A plan for income and expenses

• A loan agreement

• A list of purchases

Which of the following counts as income?

• Monthly rent

• Paycheck from a part-time job

• Grocery bill

• Car payment

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Which of the following is considered an expense?

• Stock dividends

• Birthday money from relatives

• Rent payment

• Salary

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The main purpose of a budget is to:

• Earn more money automatically

• Take control of spending to reach goals

• Avoid paying taxes

• Eliminate all wants

Which of the following is NOT a benefit of budgeting?

• Saving for the future

• Getting out of debt

• Reducing stress

• Earning extra wages

Which step comes first when creating a budget?

• Track your expenses

• Outline your income

• Review debts

• Make a shopping list