Understanding Income and Expenses

What is passive income?

• Income from selling goods

• Income received from investments without daily work

• Income earned from a job

• Income from government benefits

Which of the following is a fixed expense?

• Grocery shopping

• Electricity bill

• 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?

• Take a vacation

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

• Increase spending

• Ignore the situation

What is the purpose of an emergency fund?

• To invest in stocks

• To pay for luxury items

• To cover unexpected expenses

• To lend money to friends