Basics Beginner: Budgeting

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1.
A budget surplus means you have spent too much of your income.
Choose wisely. There is only one correct answer.
False. A surplus occurs when you are spending and saving less than your net income. This is a good thing. You have more money to allocate to your financial goals.
2.
Which of the following is an example of a fixed expense?
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Your cable bill. Your cable bill is likely to be the same amount each month, and it occurs over and over again regularly. Therefore, it is fixed.
3.
If you spend more than the net income you make in a month, you will have to _________.
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Any of the above. The money has to come from somewhere. Dipping in to your savings account steals money you have allocated for other financial goals. Borrowing by buying products using a credit card gets you off the hook from being short for the month but causes you to go into debt and carry a loan balance at a very expensive interest rate. Being late on a bill is never a good idea and can affect your credit score.
4.
Which of the following expenses is considered a variable expense?
Choose wisely. There is only one correct answer.
Gas for your car. Your gas expense is dependent on how much you drive. While you may need to drive to work and back every day, how much you drive for entertainment and travel is a choice. This can vary from month to month, and that makes gas a variable expense.
5.
All online budgeting tools cost money.
Choose wisely. There is only one correct answer.
False. Many of them are free to use.