Understanding Income and Expenses

Which of the following is considered a primary source of income for most individuals?

• Lottery winnings

• Salary from a job

• Inheritance

• Gifts from friends

What is the main purpose of creating a budget?

• To track only expenses

• To ensure all income is spent

• To plan and manage income and expenses

• To avoid paying taxes

Which of the following is an example of passive income?

• Salary from a part-time job

• Dividends from stock investments

• Tips from customers

• Freelance project payments

If a person earns $2000 per month and wants to save 20% of their income, how much should they save each month?

• $200

• $400

• $500

• $600

Which budgeting technique involves allocating every dollar of income to specific expenses or savings?

• Zero-based budgeting

• Envelope system

• 50/30/20 rule

• Pay-yourself-first method