Quiz: Understanding the Budgeting Process and Maintaining a Budget

What are the two main categories of a budget? *

Income and savings

Income and expenses

Expenses and investments

Savings and debt

Which of the following is NOT an example of essential expenses? *

Rent

Groceries

Dining out

Utilities

What is the key difference between essential and non-essential expenses? *

Essential expenses are for daily needs, while non-essential expenses are for luxury items

Essential expenses are fixed, while non-essential expenses are variable

Essential expenses are unavoidable, while non-essential expenses can be adjusted or cut if needed

Essential expenses are for bills, while non-essential expenses are for savings

Why is it important to account for irregular or seasonal income in your budget? *

It helps increase your gross income

Irregular income can be unreliable and should be used for large purchases or building savings

Irregular income is more important than regular income

It should be ignored because it’s inconsistent

What’s the best way to track your daily spending? *

Only tracking major purchases

Keeping receipts from large purchases only

Using a budgeting app or manually recording expenses daily

Estimating how much you spent at the end of the week

Which of the following is an example of a fixed expense? *

Groceries

Rent

Entertainment

Dining out

What should you do if your expenses exceed your income? *

Increase your income and reduce non-essential spending

Ignore the difference

Stop saving money

Take out a loan

7. How often should you conduct a monthly review of your budget? *

Daily

Once a year

At the end of each month

Every six months

How can budgeting apps like Mint and YNAB help you maintain your budget? *

They automatically categorize and track your expenses, helping you stay on track

They only track your savings goals

They calculate taxes for you

They can replace your entire financial plan

What is one example of how to adapt your budget to life changes? *

Keep the same budget no matter what happens

Increase non-essential spending when you get a raise

Adjust your budget to reflect changes in income or major life events, like moving or having a child

Decrease savings if you encounter unexpected expenses