Budgeting Methods
What does each number in the 50/30/20 budgeting method stand for?
Needs, wants, and savings.
Which will (typically) be smaller: gross income or net income?
Net income
True or False? An expense can be both recurring and a whammy.
False
Which of the following could be a person's savings rate?
a. $100/month
b. $1000/year
c. 5%
d. -5%
c. 5%
Give two examples of utilities.
Water, sewage, electricity, garbage, gas, etc.
What does PYF stand for?
Pay-Yourself-First
Give an example of something that could be a deduction.
Interest, expenses, tax, insurance, student loans, etc.
What type of expense are home repairs (fixed, recurring, non-recurring, whammy)?
Non-recurring
What is net worth (how is it caculated)?
Assets - liabilities
What is the difference between salaries and wages?
Salaries - periodic
Wages - hourly
Name 3 budgeting methods.
50/30/20, PYF, Zero-Based, and Cash Envelope
The amount of money received in exchange for products or services is _______?
Income
Give an example of a fixed, recurring, non-recurring, and whammy expense.
Fixed: rent, tuition, insurance, memberships
Recurring: groceries, transportation, utility bills
Non-recurring: gifts, vacations, renovations
Whammy: medical bills, natural disaster
What do you call monthly debt repayments divided by your gross income?
Debt-to-income ratio
Give two examples of passive income.
Rental income, investing, sell online courses, licensing, etc.