Questions and Answers
What is a budget?
A detailed plan to manage the spending and saving of money.
What is a deficit?
A financial shortage that occurs when liabilities exceed assets or much more cash is spent than is received.
What are discretionary expenses?
Any expense that is not considered essential to the household or business.
What is discretionary income?
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What is income?
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What is financial health?
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What are fixed expenses?
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What is a SMART goal?
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What is a SMART strategy?
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What is a variable expense?
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Study Notes
Budgeting Concepts
- Budget: A detailed plan for managing spending and saving money.
- Deficit: Occurs when liabilities exceed assets, leading to more cash being spent than received.
- Discretionary Expenses: Non-essential expenses such as entertainment, dining out, and luxury items.
- Discretionary Income: Income remaining after covering all essential financial commitments.
Income and Financial Health
- Income: Money received from various sources including wages, sales, allowances, and inheritances.
- Financial Health: An assessment of an individual or organization's financial situation.
Types of Expenses
- Fixed Expenses: Consistent costs such as mortgages, insurance, and subscriptions that do not fluctuate.
- Variable Expenses: Costs that vary over time, such as groceries and fuel prices.
Goal Setting
- SMART Goal: Characteristics of effective goals include being Specific, Measurable, Attainable, Realistic, and Time-bound.
- SMART Strategy: A framework for creating and achieving goals effectively, applicable to both individuals and organizations.
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Description
Test your understanding of budgeting concepts, income sources, and financial health. This quiz covers essential topics such as expenses, goal setting, and financial assessments. Perfect for anyone looking to improve their financial literacy.