PF: F.A. 4.1- 4.5: Budgeting Flashcard

Front

What does the 50/30/20 budgeting rule represent?

Back

The 50/30/20 budgeting rule divides income into three categories: 50% for needs, 30% for wants, and 20% for savings, investments, and debt repayment.

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What is an impulse buy?

Back

An impulse buy is a purchase made without prior planning or consideration.

Front

What are fixed costs in a budget?

Back

Fixed costs are expenses that do not change from month to month, such as mortgage and car payments.

Front

How is a budget formed using income and expenses?

Back

A budget is formed by subtracting total expenses from total income.

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What is the purpose of savings in a budget?

Back

Savings in a budget are intended for future needs, investments, and debt repayment.

Front

What does the inequality y ≥ -x + 1 represent graphically?

Back

The inequality y ≥ -x + 1 represents a region on the coordinate plane that includes all points above and on the line y = -x + 1.

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What are variable costs in a budget?

Back

Variable costs are expenses that can change from month to month, such as groceries and entertainment.

Front

What is the difference between needs and wants in budgeting?

Back

Needs are essential expenses required for basic living, while wants are non-essential expenses that enhance quality of life.

Front

Why is it important to track expenses in a budget?

Back

Tracking expenses helps individuals understand their spending habits and identify areas for improvement.

Front

What role do investments play in a budget?

Back

Investments are a way to grow wealth over time and should be considered in the savings category of a budget.