Budgeting Concepts and Financial Health

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?

Income that is available after all essential financial commitments. Signup and view all the answers

What is income?

Money that is received from any source, including the money one earns through labor, for services, from the sales of goods, allowance, disability, inheritance. Signup and view all the answers

What is financial health?

A description of a person's or an organization's finances. Signup and view all the answers

What are fixed expenses?

Expenses that remain the same regardless of the circumstances. Signup and view all the answers

What is a SMART goal?

Goals that are specific, measurable, attainable, realistic, and time-bound. Signup and view all the answers

What is a SMART strategy?

A method used by individuals and even companies to help provide a framework to how a goal should be created. Signup and view all the answers

What is a variable expense?

An expense that changes from period to period, such as food or gasoline cost. Signup and view all the answers

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.

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.