Financial Math: Building a Budget

What is the primary purpose of a budget according to the text?

• To track only your expenses

• To help you manage your money by showing how much you have, need to spend, and can save

• To increase your income from various sources

• To ensure you spend all your money each month

Why is it important to prioritize your expenses when budgeting?

• To avoid running out of money

• To spend more on entertainment

• To reduce your income

• To ignore unnecessary expenses

A budget can help you track (a)   .

• Only your debts
• Only your savings
• Your income and expenses
• Your entertainment choices

(a)   is NOT listed as a tool for budgeting in the material provided.

• Calculator
• Pen
• Paper
• Printable sheet

According to the material, what should you do after writing down your income and expenses on paper?

• Calculate the total number of expenses only

• Subtract your expenses from your income to see how much money you have left

• Ignore categorizing the expenses

• Only focus on your needs and ignore wants and savings

What can you divide your expenses into according to the budgeting advice given?

• Only into savings

• Needs, wants, and savings

• Fixed and variable costs

• Essential and non-essential

What is the first step in using the 50/30/20 rule to build a budget?

• Calculate your total expenses

• Know your income

• Identify your financial goals

• Review your spending habits

According to the 50/30/20 rule, (a)   percentage of your income should be allocated to savings?

• 50%
• 30%
• 20%
• 10%

According to the 50/30/20 rule, (a)   percentage of your income should be allocated to needs?

• 50%
• 30%
• 20%
• 10%

According to the 50/30/20 rule, (a)   percentage of your income should be allocated to savings?

• 50%
• 30%
• 20%
• 10%