Answers OK-Personal Financial Literacy S1 – EDGNTY-83861 26-27Budgeting

Budgeting Answers

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Why is net income lower than gross income?

fixed spending

budgets

withholdings

discretionary spending

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When should fixed and variable monthly budgeted expenses first be planned?

at the end of each month

day by day during the month

at the start of each month

at least twice per month

From what part of income should someone take savings?

what otherwise would be fixed expenses

gross income, before other deductions

what otherwise would be discretionary income

gross income, along with other deductions

When creating a budget, log fixed expenses

before income.

after income.

after savings.

at the top.

Leo’s car broke down, and he must find money in his limited budget to pay the repair bill.Which of the following is the best solution for Leo to handle the unplanned spending?

Leo forgoes going out to dinner.

Leo forgoes paying the rent on his apartment.

Leo forgoes paying his water bill.

Leo forgoes paying his electricity bill.

Look at this monthly budget.Monthly Budget

$20

$10

$40

$30

[BLANK]

actual

potential

likely

Kerry knows that a new car is in her future.Which would be the best strategy to help her accomplish this goal?

contribute to a savings account

give up paying for health insurance

stop paying the full amount of rent

apply for and open a new credit card

In order to stay on track for long term financial goals, money for emergency spending should be taken first from your

savings account.

discretionary money.

fixed expense money.

net income.

What type of expense is an example of the cost to drive to and from work?

a variable expense.

a fixed expense.

a short-term expense.

a discretionary expense.

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