Questions and Answers
What is a budget?
What is a variable expense?
Expense that varies in dollar amount from month to month, but that you can expect to have every month.
What is income?
Earnings received from work or through investment.
What is an investment?
Signup and view all the answers
What is personal finance?
Signup and view all the answers
What is debt?
Signup and view all the answers
What is a zero-based budget?
Signup and view all the answers
What is a cash-flow statement?
Signup and view all the answers
What is an intermittent expense?
Signup and view all the answers
What is net income?
Signup and view all the answers
What is revenue?
Signup and view all the answers
What is gross income?
Signup and view all the answers
What are deductions?
Signup and view all the answers
What is irregular income?
Signup and view all the answers
In what three ways does money flow out?
Signup and view all the answers
What is a fixed expense?
Signup and view all the answers
What is a discretionary expense?
Signup and view all the answers
Match the following expenses with their categories:
Signup and view all the answers
What is a commission?
Signup and view all the answers
What is the importance of a budget?
Signup and view all the answers
What is withholding?
Signup and view all the answers
What is the envelope system?
Signup and view all the answers
Study Notes
Budgeting Concepts
- A budget is a financial plan detailing how money will be spent over a specific period.
- Variable expenses fluctuate monthly but are recurring costs.
- Income refers to earnings from work or investments, crucial for budgeting.
- Debt represents money owed to others, affecting financial stability.
Financial Management Tools
- An investment involves allocating resources to gain future benefits.
- Personal finance encompasses all financial decisions made by individuals or families.
- A zero-based budget means income minus giving, saving, and spending equals zero.
- A cash-flow statement provides a summary of income and expenses over time.
Expense Types
- Intermittent expenses occur sporadically, like car repairs or vacations.
- Fixed expenses remain constant each month, ensuring predictability in budgeting.
- Discretionary expenses are non-essential expenditures for non-necessary items.
Income Fundamentals
- Net income is what one earns after taxes and deductions from gross income.
- Gross income is the total earnings before deductions.
- Deductions refer to amounts subtracted from paychecks for taxes or benefits.
Income Types
- Irregular income includes money from gifts, odd jobs, or unexpected sources.
- Revenue is income generated from business operations, including returns and discounts.
Financial Flow
- Money flows out through giving, saving, and spending.
- The Four Walls of expenses include shelter, transportation, utilities, and food.
Budgeting Strategies
- The envelope system helps in tracking budget categories by using cash stored in envelopes.
- Commission is earnings based on a percentage of sales, impacting total income.
- A well-planned budget is key to achieving financial success and maintaining control over finances.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
This quiz covers essential budgeting concepts, including types of expenses, financial management tools, and the importance of income. Test your understanding of how to effectively plan your finances and manage different aspects of personal finance. Perfect for anyone looking to improve their financial literacy.
