Budgeting

Question 1

Budget

Answer 1

A planning device to help a person or business achieve their financial goals and control their money.

Question 2

What are the components of a budget?

Answer 2

Income earned (money coming in) subtracted by expenses (money going out)
= surplus or deficit

Question 3

Surplus

Answer 3

When a consumer’s income is greater than their expenses, so money can be saved and invested or further spent.

Question 4

Deficit

Answer 4

When a consumer’s expenses are greater than income because of overcommitment, leading to the consumer needing to either earn more or spend less.