Personal Budgeting

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What is a variable expense?

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A variable expense is a cost that does not occur regularly and can fluctuate in amount, such as entertainment or dining out.

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What is deducted from a person's gross income and paid to the Government?

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Income Tax is deducted from a person's gross income and paid to the Government.

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What is gross income?

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Gross income is the total income earned by an individual before any deductions, such as taxes or retirement contributions.

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What is the difference between fixed and variable expenses?

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Fixed expenses are regular, consistent costs that do not change, while variable expenses can fluctuate and are not incurred regularly.

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What are wages?

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Wages are earnings paid to an employee based on an hourly rate.

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What is a budget?

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A budget is a financial plan that outlines expected income and expenses over a specific period.

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Why is it important to track expenses?

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Tracking expenses helps individuals understand their spending habits, identify areas for savings, and ensure they stay within their budget.

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What is net income?

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Net income is the amount of money an individual has left after all deductions, including taxes and other expenses, have been subtracted from gross income.

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What is the purpose of a personal budget?

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The purpose of a personal budget is to manage finances effectively, allocate resources, and achieve financial goals.

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What are some common examples of fixed expenses?

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Common examples of fixed expenses include rent or mortgage payments, insurance premiums, and loan payments.