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Financial Literacy Chapter 2 - Budgeting Flashcards | StudBud
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Financial Literacy Chapter 2 - Budgeting
Financial Literacy Chapter 2 - Budgeting
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36 cards
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Questions
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Answers
1
Net income is the amount you get paid before taxes.
True
False
2
Online budgeting apps are more effective than budgeting with pen and paper.
True
False
3
What does a budget show you?
How much money you need to earn
How much you need to save
How much money you spent last month
How much money you plan to come in and go out during the month
4
An example of a fixed expense is your grocery bill because it stays the same each month.
True
False
5
What is a good way to make sure you're creating a budget that's realistic?
Make sure you have enough 4 in savings acct to pull from if you overspend.
Make sure you create a budget every single day.
Check your calendar so you can plan for upcoming monthly expenses.
Make sure your budget is perfect . If it isn't, just don't use it.
6
An unexpected expense is if your dog eats a sock & has to have surgery. To cover this, move $ from another category.
False
True
7
How often should you create a budget?
Biannually
Daily
Monthly
Weekly
8
How many months does it usually take for your budget to start working as a budget should?
1
4
5
3
9
Detailed categories on your budget will help you make better spending decisions.
True
False
10
Why is budgeting so important?
to figure out the best way to justify purchases that aren't necessay
It helps you brush up on math skills
It gives you control of your $ and sets you up for financial success
To make sure all your money is spent by the end of the month
11
Research shows that nearly half of Americans (46%) feel stress and anxiety about the amount of _______ they have.
Catagories in their budget
Money
Debit Cards
Personal Debt
12
The Four Walls are...
A new car, eating out, games and cable
Cell Phone, Gas, Clothing and Rent
Transportation, Food, Shelter and Utilities
in my house
13
What is the envelope system?
Its a way to budget that involves putting a credit card in each envelope
A systematic approach to budgeting with a digital app
A system where you write your whole budget on an envelope
A method of budgeting that uses envelopes labeled with specific catagories
14
What kind of money counts as income?
Only money deposited into your bank account
Money in your savings account
Only the money you make at your job.
All the money you make counts
15
A common misconception is that budgeting will keep you from having fun, when in reality a budget...
Gives you permission to spend
Means there are no rules - you are free to use your money however you want
Adds more stress to your life
Restricts your fun completely
16
Why is tracking your expenses throughout the month important?
Gives insight as to whether you are sticking to the budget
It really isn't important in the long run
Allows you to delete catagories you don't like
Helps you pull money from savings to spend on other catagories
17
Your money personality can affect your _____.
Personal Values
Attitude toward budgeting
Ability to budget
Choice of bank
18
Although the majority of Americans think budgeting is important, about______ of Americans actually use a budget.
75%
35%
50%
23%
19
The best way to budget is ...
The way that works best for you
Create a spreadsheet
Use a digital app
On paper
20
The primary reason people don't budget is because they lack the behavior to stick to a budget.
True
False
21
What should you do if you overspend in one category of your budget?
Ask a friend for the money you overspent
Take money from the Giving catagory. You're giving to yourself.
Adjust your budget by removing money from other spending catagories
Just leave it. It will probably work out fine
22
Your monthly rent payment is an example of a variable expense.
False
True
23
A budget says what will happen with your money, while a cash-flow statement shows what already happened.
True
False
24
If you have an irregular income, budgeting won't work for you.
False
True
25
If you get married, only one person is responsible for budgeting.
True
False
26
How many categories should you have in your budget?
no. more than 10
No limit, use as many as needed to keep your budget accurate!
at least 3
15 or more
27
When is the right time to start creating and living by a budget?
When you start researching colleges and the costs that come along with it
Once you have a job with an income
When you decide to buy a car
Right now - It's never too early!
28
Commission is when you make money based on the percentage of ____.
Budgets
Total Sales
Items Sold
Investments
29
What is a key component of successful budgeting?
Track Spending
Stick to It
All of the above
Create It
30
Cash flow shows where your money went. It helps analyze spending so you can spend more wisely in the future.
False
True
31
Which of the following is NOT a component of a budget?
Credit Score
Saving
Giving
Income
32
The first priority in your budget should be ____.
Spending
Saving
Investing
Giving
33
Going to the movies is an example of what types of expenses?
Discretionary and Variable
Discretionary and Fixed
Intermittent and Fixed
Intermittent and Variable
34
Irregular income fluctuates each month. Some examples are commission, side hustle, seasonal employement.
True
False
35
What is a way to stay accountable to reaching your financial goals?
Finding a person you trust to help keep you on track with your decision.
Creating specific catagories in your budget
Hiring a financial advisor to make decisions for you
Looking at the budget you set at the end of the month
36
What are the Four Walls?
Food ,utilities, transportation and college
Utilities, college fund, restaurants, and car insurance
Food, utilities, shelter and transportation
Cell phone, car insurance, shelter and movie money
