gov and ec ch 2 study guide (everybody say ty em)

percentage of Americans that use a budget

35%

components of successful budgeting

income, giving, saving spending

the four walls and their priority in your budget

1. food
2. utilities
3. shelter
4. transportation

how often should you create a budget

every month

what does a budget show you

how much you plan to spend/ are preparing to spend in the future

how does a budget benefit you

pay raise, save more, less stress

budget vs cash flow statement

a budget shows what will happen, a cash flow shows what already happened

how many months does it usually take for your budget to start working as it should

3 months

what does your personality affect

your personal values

percentage of Americans stressed about personal debt

46%

types of expenses and examples of each

fixed - rent/morgage
variable - grocery, gas
intermittent - oil change
discretionary - subscriptions

define net income

money you bring home post taxes

why is tracking your expenses monthly important

what types of money counts as income

any money you earn or save during the month

how can you stay accountable to reach your financial goals

by telling a trusted friend/family member/advisor your money goals and they can help keep you in check

budgeting = freedom because it gives you the _____ to _____

permission; spend

first priority in budgeting

giving

what to do if you overspend in a category in your budget

take money from another category and adjust accordingly

commission

earnings based on a percentage of the sales made

how do you know if you're creating a realistic budget

if you look at previous expenses and compare them or you can see if the budget was accurate at the end of the month

what's the best way to budget

do what's easiest for you

envelope system

putting cash in diff envelopes for various expenses per week or month

describe irregular income and give examples

income that comes in at diff times/amounts (babysitting, mowing the lawn)

what makes it a zero-based budget

you give every single dollar you own an assigned name

how would you adjust your budget to not overspend when there's an unexpected expense

take money from another category

how do cash flow statements work? how do they benefit you?

how can cash-flow help you budget for the next month

it counts as a record for past expenses/it'll show you later down the line what kind of budgeting worked or didn't work for you