4.6 Budgeting for Fixed Costs

VIDEO: What is Wealth?

What is the definition of wealth according to this video?

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VIDEO: What is Wealth?

What would keep someone with a high income from being wealthy?

VIDEO: What is Wealth?

Select the top three MOST IMPORTANT regular expenses for most people.

• Housing, food, transportation

• Entertainment, travel, clothing

• Gifts, hobbies, luxury items

• Subscriptions, gadgets, vacations

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VIDEO: What is Wealth?

Budgeting can help someone build their wealth no matter what their income is by:

• Allowing them to track spending and save consistently

• Guaranteeing a high income

• Eliminating all expenses

• Making them rich overnight

VIDEO: What is Wealth?

There are situations where a person would not be able to build wealth. Which of the following best explains this?

• Lack of access to resources and opportunities

• Having a high-paying job

• Investing wisely

• Receiving financial education

​ (a)   expenses are ​ (b)   costs that are ​ (c)   of your use. While ​ (d)   expenses are​ (e)   on how much you use them.

• Fixed
• fixed
• independent
• variable
• dependent
• High
• high
• Low
• low

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Which do you think has a bigger impact on your finances as a student: fixed expenses or variable expenses?

• Fixed expenses

• Variable expenses

• Both have equal impact

• Neither has significant impact

Would fixed expenses have a bigger impact on your finances as an adult versus being a student? Why or why not?

• Yes, because adults have to pay rent and other expenses previously covered by the family.

• No, because age does not change how people spend.

• Yes, because adults are less likely to change their spending.

• No, because adults and children spend the same way.

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It is easier to save money by cutting down on which type of expenses?

The federal government defines a person to be housing-burdened if their housing costs are at least 30% of their income (not 30% of the cost of living). If you earn the national median wage of $59,384. In which of these cities would you be considered housing-burdened?

• New York City

• Los Angeles

• San Diego

• Austin

• Phoenix

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