Budgets and Financial Records

Question 1

Disposable Income

Answer 1

money left after bills and taxes

Question 2

Budget

Answer 2

spending and saving plan based on income and expenses

Question 3

4 steps to Preparing a Budget

Answer 3

1. Estimate your income
2. Estimate your expenses
3. Decide how much to save
4. Balance your budget

Question 4

Fix Expenses

Answer 4

costs that do not change from month to month

Question 5

Examples of fixed expenses

Answer 5

bills, rent, car loans

Question 6

Variable Expenses

Answer 6

costs that vary in amount and type, depending on you choices

Question 7

Examples of variable expenses

Answer 7

shopping, groceries

Question 8

Rule of Thirds

Answer 8

All income should go towards Fixed, Variable, and Savings (50% 30% 20%) or (30% 30% 30%)

Question 9

4 types of Budgets

Answer 9

Traditional, zero-based, envelope, reverse

Question 10

Traditional

Answer 10

log income and expenses in a notebook and base income and costs on previous months or years

Question 11

Zero based

Answer 11

all money is allocated to a category in advance. There’s no money left at the end of the cycle

Question 12

Envelope

Answer 12

Divide available money into envelopes by spending category, when money runs out, there is non left for that time period for that category

Question 13

Reverse (pay yourself first)

Answer 13

Prioritize savings and put money into savings before making any purchases for the month. Whatever is left over after meeting your savings foal is what you have left to spend

Question 14

Net worth Statement

Answer 14

shows a person’s net worth based on their assets and liabilities

Question 15

How do you calculate Net worth

Answer 15

Assets - Liabilities = Net worth

Question 16

Insolvent

Answer 16

when liabilities are greater than your assets

Question 17

Personal Property Inventory

Answer 17

list of the valuable items you own, along with their purchase price and approximate current value

Question 18

Prenuptial Agreements

Answer 18

states who receives what assets and liabilities if a marriage end in divorce

Question 19

Express contract

Answer 19

terms are spelled out verbal and written

Question 20

Examples of express contracts

Answer 20

loans, mortgages, rental agreements

Question 21

Implied contract

Answer 21

Inferred by the actions of the parties involved

Question 22

Examples of implied contracts

Answer 22

doctors visit, neighbors agreeing to scoop snow and mow lawns

Question 23

Counteroffer

Answer 23

when one person makes an offer and another person changes it

Question 24

Promissory Note

Answer 24

a written promise to pay a certain sum of money to another person or to the holder of the note on a specified date and can be enforced by law

Question 25

Co signer

Answer 25

person who promises to pay the debt of another person if the original maker fails to pay

Question 26

Warranty

Answer 26

a “guarantee” is a statement assuming quality and performance of a product or service

Question 27

Implied warranty

Answer 27

states that the product will operate as it is intended to by design

Question 28

Express warranty

Answer 28

states a guarantee that the product will last or function for a length of time

Question 29

Gross Pay

Answer 29

pay before deductions

Question 30

Net pay

Answer 30

pay after deductions

Question 31

Where can you go to notarize a document

Answer 31

Bank, court house

Question 32

Notarize

Answer 32

someone who verifies a signature