Budgeting Test Study Guide
6.1 Choose Financial Goals
1. Define the term budget.
2. What is the first step in the budgeting process?
3. What are budgets based upon?
4. Define the term short-term goal.
5. List several examples of short-term goals.
6. Define the term long-term goal.
7. List several examples of long-term goals.
8. A successful budget is focused on what?
6.2 Track Income and Expenses
1. What is the second step of the budgeting process?
2. What is the purpose of keeping financial records?
3. What income records should you keep?
4. What spending records should you keep?
Budgeting Test Study Guide
5. Define the term fixed expenses.
6. Define the term flexible expenses.
7. Define the term luxury goods.
8. What are the advantages of fixed expenses in preparing your budget?
9. If you want to cut spending, do you start with your fixed expenses or your flexible expenses?
10. When you make adjustments to your budget, is it easier to change your fixed expenses or your
flexible expenses? Why?
11. What is a mistake many young people make when they are first starting out with their first job?
12-13. Use the following to answer questions 12 and 13
Mortgage payment
Groceries
Electric bill
Gas
Rent
Food
12. Which of these are fixed expenses?
13. Which of these are flexible expenses?
Car payment
Entertainment
Budgeting Test Study Guide
6.3 Your Budget Worksheet
1. What is the third step of the budgeting process?
2. Define the term budget worksheet.
3. What are the 5 steps to prepare your budget worksheet?
4. If you spend more than you planned on a budget item (ex: gifts) are you over-budget or underbudget?
5. If your monthly budget includes an expense of $200 for groceries, what would your annual
budget amount for groceries be?
6. If you get paid $50 a week for tutoring a kid in your neighborhood, what would your total
income for 4 weeks be?