FL Budgeting Review

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

• Food and groceries

• Gas for your car

• Charitable contributions

• Mortgage or rent payments

The best way to start the budgeting process is to:

• Start tracking all of the money you spend for a period of time, usually a month so that you have an understanding of where your money goes

• Automatically deposit money into a savings account with each paycheck

• Pay your credit card balance(s) in full each month

• Curb your spending on incidental items such as dining out or entertainment

What is the most likely reason for a budget to fail?

• Buying a pair of shoes you just couldn't resist

• Not using a personal financial planning website or software

• Failing to establish an emergency fund to account for unforeseen expenses

• Not making enough money

Budget

• Anything that you might incur an expense for

• Is a spending plan for managing your money that includes income and expenses

• All expenses deducted from income before net pay can result.

• Income after all deductions have been paid.

Variable expenses

• Necessary things or items that are paid monthly

• Expenses that increase/decrease monthly/yearly

• Is a spending plan for managing your money that includes income and expenses.

• Expenses that remain the same over a period of time.

On the first day of every month, Raina sits down at her computer, builds a spreadsheet, and allocates all of her income toward expenses or saving. There’s no dollar that is unaccounted for in her budget. Which strategy is Raina using?

• Cash envelope system

• 50/30/20 budgeting

• Zero-based budgeting

• Expense management

Which piece of advice about budgeting for variable expenses is most useful?

• Aim to reduce your variable expenses to $0 on your budget because they are always “wants”

• Track your variable expenses for a few months to find your average monthly costs

• Do NOT budget for variable expenses, since they only make 5% of total spending on average

• Focus on budgeting for fixed expenses because they are easier to change

Which of these statements accurately describes fixed expenses in a budget?

• They are often hard to change and they usually make a small impact on your budget

• They are often easy to change and they usually make a small impact on your budget

• They are often hard to change and they usually make a large impact on your budget

• They are often easy to change and they usually make a large impact on your budget

Which of these expenses is typically the largest single expense for American households?

• Food

• Housing

• Insurance

• Transportation

The time frame of a personal budget is:

• 1 week
• 1 month
• 6 months
• Annual