FINANCIAL LITERACY UNIT 2 STUDY
GUIDE EXAM AND ANSWERS.
fixed expenses - Answers-cost you're obligated to pay at specific times, regardless of
events
variable expenses - Answers-costs that vary in amount and type depending on events
and choices you make
examples of fixed expenses - Answers-student loans, mortgage, and car loan payments
examples of variable expenses - Answers-groceries, gas, and personal care items
financial plan - Answers-set of goals for spending, saving, and investing the money you
earn
What does it mean to live within your income? - Answers-You don't spend more money
than you have.
What four types of personal records should you prepare and keep in a safe place? -
Answers-tax records, personal inventory, statement of net worth, and record of income
and expenses (budget)
zero-based budget - Answers-a budget where the expected income equals the
expenses plus the savings
Why should you prepare a budget? - Answers-You can see how much you earn and
make sure you don't spend more money than you have.
What are the four steps in preparing a budget? - Answers--Estimate total expected
income for a certain time period
-Decide how much of income you want to save
-Estimate expenses
-Balance your budget
disposable income - Answers-money you have left to spend or save after taxes have
been taken out; take home pay
What choices do you have if your initial budget doesn't balance? - Answers-reduce the
amount spent on variable expenses, remove some of your money from your savings if
you planned to save more than 10% of income, or find cheaper options from stuff like
your cell phone plan
GUIDE EXAM AND ANSWERS.
fixed expenses - Answers-cost you're obligated to pay at specific times, regardless of
events
variable expenses - Answers-costs that vary in amount and type depending on events
and choices you make
examples of fixed expenses - Answers-student loans, mortgage, and car loan payments
examples of variable expenses - Answers-groceries, gas, and personal care items
financial plan - Answers-set of goals for spending, saving, and investing the money you
earn
What does it mean to live within your income? - Answers-You don't spend more money
than you have.
What four types of personal records should you prepare and keep in a safe place? -
Answers-tax records, personal inventory, statement of net worth, and record of income
and expenses (budget)
zero-based budget - Answers-a budget where the expected income equals the
expenses plus the savings
Why should you prepare a budget? - Answers-You can see how much you earn and
make sure you don't spend more money than you have.
What are the four steps in preparing a budget? - Answers--Estimate total expected
income for a certain time period
-Decide how much of income you want to save
-Estimate expenses
-Balance your budget
disposable income - Answers-money you have left to spend or save after taxes have
been taken out; take home pay
What choices do you have if your initial budget doesn't balance? - Answers-reduce the
amount spent on variable expenses, remove some of your money from your savings if
you planned to save more than 10% of income, or find cheaper options from stuff like
your cell phone plan
