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Terms in this set (13)
When preparing a monthly budget, describe how net income is calculated.
Net income is calculated by taking the income subtotal and subtracting the expenses subtotal.
A budget is a list of all income and planned expenses.
Income is money coming in through wages, allowance or other sources.
Anything on which money is spent is referred to as expenses.
Alejandro lives in a small apartment, within walking distance to school. He takes the bus to work where he makes $10 per hour after taxes and works 30 hours per week. He wants to save money to buy a $6000 car within the next 2 years. How could a monthly budget be created to help Alejandro meet his financial goals? Select the best option.
Alexa has finished her culinary training program and is now working full-time as a chef in a hotel resort restaurant. She has tripled her salary from when she was working part-time to pay her expenses through school. How should this increased income affect her budget? Make comparisons with her previous budget and her current budget.
Alexa is earning quite a bit more money than she was previously. This would be a good time for her to re-evaluate her budget. Part of the extra money she is making could be put in her savings account.
Analyze the following budget, with an income of $750, to determine how much can be spent on food for the month.
No more than $60 can be spent on food.
Sofia still lives at home, but helps with the rent paying $200 per month. She has a job that pays about $700 per month after taxes. She has to pay for her own personal items such as clothing and toiletries spending about $120 per month. Going out with friends is important to her, but she also wants to save money to buy her own car. Select the budget that would best help meet her goals.
Antonio is ready to move out of his parent's house and live on his own. He found a great apartment that has all utilities included. His job as an assistant plumber requires him to have a car, but his hours are flexible enough to give him time on the weekends to have fun with his friends. What is the best way Antonio's budget can be modified to help him save enough for the $200 down payment and make the $500 monthly rental payment?
Antonio could reduce his monthly entertainment expenses by $75 and his food expenses by $50 to pay the monthly rent. He could take $200 out of savings once for the deposit.
Maddox wants to go back to college full-time. His current employer has agreed to reduce his hours from 40 hours to 25 hours while retaining his current rate of pay. Maddox has lived in his own apartment for 1 year and really likes his independence. Which of the following budgets below would fit his new situation?
Modified Budget A
Give an example of when an actual net income would result in a negative number.
When the actual expenses exceed the actual income, the result would be a negative dollar amount.
If $2300 is spent on vacations or travel each year, estimate how much should be set aside each month for those expenses?
Approximately $200 per month should be set aside for vacation or travel expenses.
What is one difference between yearly and monthly budgets?
There is more uncertainty as you plan further ahead, so a yearly budget needs more room to account for unplanned expenses than a monthly budget does.
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