(i) A household budget is a __________ plan
(a) Personal
(b) Family
(c) Financial
Correct Answer is Option (c)
(ii) Budgeting helps you to prevent reckless_______
(a) Spending
(b) Income
(c) Saving
Correct Answer is Option (a)
(iii) Making budget a ___________ affair
(a) Personal
(b) Participative
(c) Non-Participative
Correct Answer is Option (b)
(iv) __________is an expense where we can have better control
(a) Non-Discretionary
(b) Saving
(c) Discretionary
Correct Answer is Option (c)
(v) By creating a _______ you can decide how you will use your money
(a) Budget
(b) Chart
(c) Diagram
Correct Answer is Option (a)
(i) One of the critical activity to achieve the financial goal is make for your expenses.
(ii) A ________ budget is your financial plan in which you allocate the family income towards various expenses and savings.
(iii) __________ is the key element which enables you to fulfill your financial goals.
(iv) To improve our budget control we must do every month
(v) Creating a budget will help you plan and balance between money _____ and money_____.
(i) Budget
(ii) Household
(iii) Budget
(iv) Review periodically
(v) Received and spent
(i) Household Budget - Income/Expenditure Statement for 2 months
(ii) Family Budget - Expense that cannot be controlled
(iii) No deficit - Review every month
(iv) Non-Discretionary - Exercise control over money
(v) Budget Control - Expense within our income
(i) Household Budget - Review every Month
(ii) Family Budget - Income/Expenditure statement for 2 months
(iii) No deficit - Expense within our income
(iv) Non-Discretionary - Expense that cannot be controlled
(v) Budget Control - Exercise control over money
(i) A budget enables you to become aware of how money comes in and where it is spent.
(ii) By creating a budget you can decide on how you will use your money
(iii) Discretionary expense is an expense where we cannot have better control
(iv) It is not advisable to involve all members of the family at the time of preparation of budget.
(v) Savings is any money left after your Expenditure
(i) True
(ii) True
(iii) False
(iv) False
(v) True
What is a Budget?
Ans: A budget is a financial plan that allocates future personal income towards expenses, savings, and debt repayment.
What is Household Budgeting?
Ans: Household budgeting is the process of creating a plan to manage household income and expenses to ensure financial stability and achieve financial goals.
Give Examples for Discretionary & Non-Discretionary Expenses?
Ans:
Discretionary Expenses: Entertainment, dining out, vacations.
Non-Discretionary Expenses: Rent, utilities, groceries.
What is Savings?
Ans: Savings is the portion of disposable income not spent on consumption but set aside for future use.
What is Budget Review? When is it required?
Ans: A budget review is the process of evaluating and adjusting a budget to reflect changes in income, expenses, and financial goals. It is required periodically, such as monthly or quarterly, to ensure financial plans remain effective.
1. Differentiate between Discretionary & Non-Discretionary Expenses.
Ans: Discretionary Expenses: Expenses that are non-essential and can be adjusted or eliminated without impacting daily life.
Non-Discretionary Expenses: Essential expenses that are necessary for daily living and cannot be easily adjusted or eliminated.
2. What is a Personal Budget? In your opinion, how one can adhere to his Budget?
Ans: Personal Budget: A personal budget is a financial plan that allocates an individual’s future income towards expenses, savings, and debt repayment.
Adhering to a Budget:
3. Define
a) Savings: Savings is the portion of disposable income that is not spent on consumption but set aside for future use or emergencies.
b) Income: Income is the money received, especially on a regular basis, for work or through investments.
c) Expenditure: Expenditure is the action of spending funds; it includes all outlays of cash for goods and services.
4. What are the advantages of a Household Budget?
Ans: Advantages of a Household Budget:
Track Your Spending: For one month, write down all your expenditures. This helps you understand where your money is going and identify areas where you can cut back.
Categorize Your Expenses: Do not change your spending habits initially. Instead, put your expenses into various categories like groceries, utilities, transportation, entertainment, etc. This categorization helps in understanding spending patterns and identifying non-essential expenditures.
Avoid Unnecessary Loans: Avoid taking loans unless absolutely necessary. Loans can increase your financial burden due to interest payments. Prioritize saving for large expenses instead of borrowing.
Involve Family Members: Involve all family members in the budgeting process. This ensures that everyone understands the financial situation and agrees to the budget, making it easier to stick to.
Set Realistic Goals: Set achievable and realistic financial goals. This includes short-term goals (like monthly savings targets) and long-term goals (like buying a house or saving for education).
Create a Savings Plan: Allocate a portion of your income to savings each month. Treat savings like a fixed expense to ensure you set aside money regularly.
Review and Adjust Regularly: Review your budget periodically. Adjust it based on changes in income, expenses, or financial goals. Regular reviews help keep the budget relevant and effective.
Use Budgeting Tools: Use budgeting tools or apps. These tools can help you track spending, categorize expenses, and monitor progress towards your financial goals.
Plan for Emergencies: Include an emergency fund in your budget. This fund should cover at least three to six months of living expenses to protect against unexpected financial setbacks.
Be Flexible: Be flexible and adjust the budget as needed. Life is unpredictable, and your budget should be able to adapt to changes in your financial situation.
Ans: Being a good money manager is crucial for achieving financial goals on time. Here’s how effective money management contributes to timely goal achievement:
Financial Discipline: Good money management instils financial discipline, ensuring that you allocate your income wisely between expenses, savings, and investments. This disciplined approach prevents impulsive spending and helps maintain a steady path toward your goals.
Budgeting: A well-planned budget is the cornerstone of money management. It allows you to track your income and expenses, ensuring that you live within your means. By following a budget, you can allocate funds towards your financial goals systematically.
Savings and Investments: Effective money management emphasizes the importance of regular savings and prudent investments. By consistently saving a portion of your income and investing wisely, you can grow your wealth and reach your financial targets, such as buying a house, funding education, or building a retirement fund.
Debt Management: Managing money well includes handling debt responsibly. Avoiding unnecessary loans, paying off high-interest debt promptly, and maintaining a healthy credit score are all aspects of good money management that prevent financial strain and free up resources for achieving your goals.
Emergency Preparedness: A good money manager always plans for emergencies by maintaining an emergency fund. This fund acts as a financial cushion during unexpected events, preventing disruptions to your financial plans and keeping you on track toward your goals.
Regular Reviews: Regularly reviewing and adjusting your financial plan ensures that it remains aligned with your goals. Monitoring your progress helps identify any deviations and allows you to make necessary corrections, keeping you on track for timely goal achievement.
Setting Priorities: Effective money management involves setting financial priorities. By identifying and focusing on your most important financial goals, you can allocate resources more efficiently and achieve these goals within the desired timeframe.
Avoiding Financial Stress: Good money management reduces financial stress by providing a clear roadmap for achieving goals. With a well-structured plan, you can avoid the anxiety associated with financial uncertainty and concentrate on reaching your targets.
Maximizing Returns: Being a good money manager means making informed investment decisions. By choosing the right investment vehicles and strategies, you can maximize returns on your savings, accelerating the achievement of your financial goals.
26 videos|33 docs
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1. What is the importance of making a budget? |
2. How can I create a budget effectively? |
3. What are some common budgeting mistakes to avoid? |
4. How can I stick to my budget and avoid overspending? |
5. How can I save money and cut costs while following a budget? |
26 videos|33 docs
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