Understanding Income and Expenses

What is passive income?

• Income received from investments without daily work

• Income from freelance work

• Income from selling goods

• Income earned from a job

Which of the following is a fixed expense?

• Electricity bill

• Groceries

• Dining out

• Rent

Why is budgeting crucial?

• To eliminate all expenses

• To avoid paying taxes

• To track spending and save for future goals

• To increase your income

What should you do if your expenses exceed your income?

• Increase spending

• Take a vacation

• Ignore the situation

• Cut back on extra spending or find ways to increase income

What is the purpose of an emergency fund?

• To invest in stocks

• To cover unexpected expenses

• To pay for luxury items

• To avoid paying taxes