Lesson 3.1/3.2 Flashcard

Front

What is the formula to calculate the average monthly expenditure?

Back

Average Monthly Expenditure = (Total Expenditure over a period) / (Number of months)

Front

How do you find the total monthly fixed expenses from a budget sheet?

Back

Total Monthly Fixed Expenses = Sum of all fixed expenses listed in the budget sheet.

Front

What are fixed expenses?

Back

Fixed expenses are costs that do not change from month to month, such as rent, insurance, and loan payments.

Front

What is the significance of calculating average expenditures?

Back

Calculating average expenditures helps in budgeting and understanding spending patterns over time.

Front

How do you calculate the average of multiple expenditures?

Back

Add all the expenditures together and divide by the number of expenditures.

Front

What is the difference between fixed and variable expenses?

Back

Fixed expenses remain constant, while variable expenses can fluctuate based on usage or consumption.

Front

What is a budget sheet?

Back

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

Front

How can you determine the monthly share of annual expenses?

Back

Monthly Share of Annual Expenses = Total Annual Expenses / 12.

Front

What is the importance of tracking monthly expenditures?

Back

Tracking monthly expenditures helps individuals manage their finances, identify spending habits, and make informed financial decisions.

Front

What is the role of life insurance in a budget?

Back

Life insurance is a fixed expense that provides financial protection for dependents in case of the policyholder's death.