Questions and Answers
Taxes and withholds impact your ________.
net income
The cost of groceries and gas is considered a _______.
variable expense
To budget with a _________, prioritize expenses for most to least important.
irregular income
A _______ needs to be evaluated in light of your other expenses for the month.
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A _________ stays the same from month to month.
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A ________ should account for fixed, variable, intermittent, and discretionary expenses based on income.
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What does a budget actually tell you?
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The envelope system is especially helpful for expenses like ______.
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The three priorities in your budget, after listing income, are _______.
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Specific categories are important to consider when creating a budget so you can _____ .
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What is it called when you make money on the percentage of the total sales you make?
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What is not a type of discretionary expense?
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What's your biggest wealth-building tool?
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When you're creating your monthly budget, what's the first priority under 'expenses'?
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If you approach money with a generous spirit, you'll be _________.
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What will tracking expenses help you do?
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What's a zero-based budget?
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Study Notes
Budgeting Concepts
- Net Income: The amount of money taken home after taxes and withholdings.
- Variable Expenses: Costs that can change, such as groceries and gas.
- Irregular Income: When budgeting, prioritize expenses from most to least important to ensure essential expenses are met first.
Expense Types
- Discretionary Expenses: These should be evaluated considering other monthly expenses.
- Fixed Expenses: Costs that remain consistent each month.
- Zero-Based Budget: A budgeting method that accounts for fixed, variable, intermittent, and discretionary expenses based on income, ensuring every dollar is assigned a purpose.
Budgeting Behavior
- A budget guides spending by indicating what to spend money on, rather than restricting expenditures.
- The envelope system is beneficial for managing specific expenses like eating out and groceries.
Budget Priorities
- Following income, the three budget priorities include giving, saving, and spending.
- Organizing spending is crucial when creating a budget through specific categories.
Income and Earnings
- Commission: Earnings made based on a percentage of total sales.
- Wealth-Building Tool: The most significant tool for wealth accumulation is income.
Budgeting Practices
- The first expense priority in a monthly budget is typically giving.
- Approaching money with generosity leads to increased gratitude.
- Tracking expenses helps maintain adherence to a budget, identify errors, and adjust as needed.
Understanding Budgeting Tools
- A zero-based budget ensures that all money has a designated purpose, promoting more efficient financial management.
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Description
Test your knowledge on the fundamental concepts of budgeting with this chapter review. The flashcards cover key terms like net income and variable expenses. Perfect for students learning the basics of managing finances.
