EVERFI Module 3: Budgeting Flashcards

Questions and Answers

Which of the following is NOT a good way to track your spending?

Using an app

In your head (correct)

Using a spreadsheet

Writing it down in a notebook

Recurring expenses are expenses that occur every month.

True

The envelope method, notebook and pencil, and online software are all methods of ___

tracking your spending

What is NOT a good way to prevent unnecessary spending?

Buy all of your wants at one time Signup and view all the answers

When setting a budget, you can choose to make room for:

All of the above Signup and view all the answers

What should be considered when setting a budget?

Needs, wants, and savings Signup and view all the answers

Where should you look to find your current expenses when building your budget?

Bank and credit statements Signup and view all the answers

How can you ensure you don't go over your budget?

Round up your expense estimates to add a buffer Signup and view all the answers

Which of the following is NOT a benefit of using a budget?

A budget can help you purchase anything you want Signup and view all the answers

When setting a budget, you should consider...

Financial goals, current expenses, and income Signup and view all the answers

They do not occur if you have a budget.

False Signup and view all the answers

What budgeting tip(s) would help you stay on track financially?

All of the above Signup and view all the answers

Which of the following expenses would be a good reason to spend money from an emergency fund?

Repair your laptop that you use for homework Signup and view all the answers

They should be planned for.

True Signup and view all the answers

An unanticipated expense that will make it difficult to get by day-to-day would be a candidate for...

Emergency funding spending Signup and view all the answers

In addition to needs, what should you plan for first when creating a budget?

Recurring expenses Signup and view all the answers

Which of the following should NOT be considered when setting a current budget?

Future income Signup and view all the answers

An emergency fund should NOT be used for...

Going to the movies Signup and view all the answers

Which of the following is a benefit of using a budget?

All of the above Signup and view all the answers

Which choice or choices best describes the purpose of an emergency fund?

All of the above are good reasons to have an emergency fund Signup and view all the answers

Study Notes

Budgeting Concepts

Tracking Spending: The least effective method is keeping track of expenses in your head.
Recurring Expenses: These are fixed costs that occur monthly, such as rent or utilities.
Methods of Tracking Spending: Effective ways include the envelope method, using a notebook, or employing online software.

Spending Prevention Strategies

Avoiding Unnecessary Spending: Planning to buy all wants at once is not a good strategy for maintaining a budget.

Budgeting Essentials

Budget Flexibility: When setting a budget, allocate resources to needs, wants, and savings.
Expense Sources: Current expenses can be assessed through bank and credit statements.

Budget Management Tips

Avoiding Over-budgeting: Round up expense estimates to create a financial buffer.
Benefits of a Budget: A budget helps manage expenses but does not allow for unlimited purchases.

Planning for Future Needs

Budget Considerations: Assess financial goals, current expenses, and income while budgeting.
Unexpected Expenses: Having a budget does not eliminate unexpected costs; these should be anticipated.

Emergency Funds

Usage of Emergency Funds: Appropriate uses include essential repairs, such as a laptop needed for schoolwork.
Planning for Emergencies: Unexpected expenses should be planned for in your budgeting strategy.
Emergency Fund Limitations: Funds should not be used for non-essential entertainment expenses, like going to the movies.

Overall Benefits of Budgeting

Budgeting Tips: Incorporating various budgeting strategies can help maintain financial stability.
Emergency Fund Purpose: The emergency fund is essential for handling unforeseen financial challenges and should serve multiple purposes.

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Description

Test your knowledge on budgeting with these flashcards from Module 3 of EVERFI. Each card covers essential concepts including tracking your spending and understanding recurring expenses. Perfect for anyone looking to improve their financial literacy.