Chapter 2 Budgeting

Study Guide 21

1. Although the majority of Americans think budgeting is important, about__35%____ of

Americans actually use a budget.
2. What are the major components of a budget? _____income, spending, savings
_____________________________
3. Which form of budgeting is most effective? Online budgeting apps or pen and
paper.__online_______________
4. What are the Four Walls? _____food, utilities, transportation,
personal__________________________
5. How many categories should you have in your budget? _as much a you need._______
6. How often should you create a budget? ____before you get paid
_______________________________
7. If you get married, who is responsible for budgeting? __both_______________________
8. What does a budget show you? _____Where you put your money
_______________________________________
9. Detailed ___categories_____________ on your budget will help you make better spending
decisions.
10. A _budget__________ says what will happen with your money, while a ___cash flow
statement_____________ statement shows what actually happened.
11. How many months does it usually take for your budget to start working as a budget
should? ___2________________
12. Your money personality can affect your ____attitude___________
13. Research shows that nearly half of Americans (46%) feel stress and anxiety about the
amount of ___debt____ they have.
14. Going to the movies is an example of what types of expenses?
____discretionary___________
15. __gross____________income is the amount you get paid before taxes.
16. Why is tracking your expenses throughout the month important? _______making
adjustments __________________________________________________________
17. What kind of money counts as income?______Any money
___________________________
18. What is a way to stay accountable to reaching your financial goals? ________be honest
with yourself.________________________________________________________
19. A common misconception is that budgeting will keep you from having fun, when in
reality a budget will _________________________________________________
20. The first priority in your budget should be ____giving________.
21. When is the right time to start creating and living by a budget? ___right
away____________
22. What should you do if you overspend in one category of your budget? __________give to
other ones_______________________________________________________
23. Commission is when you make money based on the percentage of __sales_________
24. What is a good way to make sure you're creating a budget that's realistic? ____stay
consistent________________________________________________________________
___
25. The primary reason people don't budget is because they ___fail_____________to stick to
a budget.
26. Your ________groceries______________payment is an example of a variable expense.
27. The best way to budget is..._________________________________________
28. What is the envelope system? _______when you put cash
away_________________________________
29. What is an irregular income? Will a budget still work in the system? ______when your
income flunctuates_________________________________________________________
30. Why is budgeting so important? _________So you can avoid debt, and so you can have
control over what you spend.
________________________________________________________