Assignment 3

Question 1

emergency reserves

Answer 1

cash to meet regular expenditures when income wont

Question 2

expenditures

Answer 2

cash outflow/spending

Question 3

dissaving

Answer 3

spending more than you made

Question 4

income

Answer 4

money from salary, profits, investments

Question 5

after-tax income

Answer 5

amount you can spend

Question 6

3 benefits of maintaining a budget, as discussed in class

Answer 6

forces you to plan and prioritize
helps avoid and minimize debt
allows determination of emergency reserve amount

Question 7

4 qualities/characteristics of a good goal, as discussed in class

Answer 7

Realistic/Obtainable
Timeframe based
Measurable
Specific

Question 8

5 examples of common problems experienced in budgeting

Answer 8

lack of discipline
failure to compare budget to actual expense
underestimating expends/overestimating future income
partners often lack common save & spend goals
partners fail to communicate spendings

Question 9

what situation require larger reserves

Answer 9

if the economy is building uncertainty

Question 10

whether it is more important for lower-income households to build emergency cash reserves than it is for high-income households

Answer 10

important for all

Question 11

whether individuals work harder the closer they get to reaching a goal, or not

Answer 11

harder as it gets closer