Lesson 10.1/10.2 Budgeting Flashcard

Front

What is the 50/20/30 Budget?

Back

A budgeting method that allocates 50% of income to needs, 20% to savings, and 30% to wants.

Front

What is a Zero-Based Budget?

Back

A budgeting method where every single dollar of your income is assigned to a specific expense.

Front

What does 'Pay Yourself First' mean in budgeting?

Back

A budgeting strategy where you transfer a predetermined amount into savings at the beginning of the month.

Front

What is the purpose of budgeting?

Back

To manage income and expenses effectively, ensuring financial stability and goal achievement.

Front

How much should you allocate to savings and debt repayment in a 50/30/20 budget if your income is $5000?

Back

$1000.

Front

What is the main disadvantage of the 50/20/30 budget?

Back

Not having enough money to cover expenses.

Front

What does 'needs' refer to in budgeting?

Back

Essential expenses required for basic living, such as housing, food, and utilities.

Front

What are 'wants' in the context of budgeting?

Back

Non-essential expenses that enhance quality of life, such as entertainment and dining out.

Front

What is the significance of savings in a budget?

Back

Savings provide financial security and help achieve future financial goals.

Front

What is an example of a fixed expense?

Back

Rent or mortgage payments.