Budgeting

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What is a budget?

Back

A budget is a plan that outlines expected income and expenses over a specific period, helping individuals manage their finances.

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What does it mean to be on an 'over budget'?

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Being 'over budget' means that your expenses exceed your income, leading to potential financial issues.

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How do you calculate total savings over time?

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To calculate total savings, multiply the amount saved each month by the number of months saved.

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What is the first priority when budgeting?

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The first priority when budgeting should be essential needs, such as groceries.

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What is the difference between a 'want' and a 'need' in budgeting?

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A 'need' is something essential for survival (like food), while a 'want' is something that is desired but not essential (like entertainment).

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What should you do if your expenses exceed your income?

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If your expenses exceed your income, you should revise your budget to reduce spending or increase income.

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What is an example of a fixed expense?

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A fixed expense is a cost that does not change, such as rent or a monthly subscription.

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What is a variable expense?

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A variable expense is a cost that can change from month to month, such as groceries or entertainment.

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Why is it important to track your spending?

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Tracking your spending helps you understand where your money goes and allows you to make informed budgeting decisions.

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What is the purpose of savings in a budget?

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Savings provide a financial cushion for emergencies and future expenses, helping to ensure financial stability.