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WorksheetsFL Budgeting Review
Total questions: 27
Worksheet time: 1hrs 22mins
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
From the following, which should you cut out of your budget first if you needed to balance your budget?
entertainment
groceries
rent
car payment
Costs of items like groceries and gas are considered:
Fixed
Discretionary
Variable
Irregular
What is the first rule of creating a budget?
Spend your money - you earned it.
Always put your money in a safe place.
Never lend money to friends.
Pay yourself first.
What is the first step in creating a personal budget?
Create a savings plan.
Determine income and expenses
Track spending habits.
Set financial goals.
Why is it important to track expenses?
To have less control over finances, overspend, ignore financial goals, and waste money.
To achieve financial goals, save money, manage finances, and identify overspending.
To manage and control finances, identify overspending, save money, and achieve financial goals.
To increase debt, ignore financial goals, overspend, and mismanage finances.
What is the recommended percentage of income to allocate for savings in a personal budget?
30%
10%
50%
20%
What is the difference between fixed and variable expenses?
Fixed expenses are always higher than variable expenses.
Fixed expenses are only applicable to businesses, while variable expenses are for individuals.
Fixed expenses remain the same, while variable expenses can change.
Fixed expenses are one-time payments, while variable expenses are recurring.
How often should you review and adjust your personal budget?
Never
Monthly
Annually
Weekly
What is the importance of having an emergency fund in your budget?
To spend on luxury items.
To have a safety net for unexpected expenses.
To increase your debt.
To ignore the importance of financial planning.
