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Personal Finance Courses: Budgeting

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1.
Which of the following expenses is considered a variable expense?
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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.
2.
You should avoid spending money on wants.
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False. Wants are okay to spend money on and may be items that we allow ourselves to pay for as a reward for hard work and saving. The key is to ensure you are not forgoing spending money on or saving for other needs not taken care of yet. In other words, what is the opportunity cost of paying for your want?
3.
Budgeting software can provide financial forecasts for your financial data.
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True. Not all software offers this, however. The ones that do are more advanced and pricey.
4.
If you have money in your budget left over, what might be the best use for it?
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Put it toward important short and long-term goals. Having money left over (in other words, having savings) means you can put the money toward important goals in life.
5.
If your expenses are less than your income, the resulting difference can be called your savings.
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True. The money left over is savings, which you can use to help you reach your future financial goals.