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Chapter Review
Summary
A budget is an estimate of expected income and expenses for a given period
of time. A budget may be prepared for a week, a month, or a longer period, such
as a year. Expenses are amounts paid for goods or services. Fixed expenses are
those that stay the same each month, such as amounts paid for school lunches
or bus passes. Variable expenses are those that change from month to month,
such as amounts paid for cell phone bills. Income is money you receive, such
as pay from a job or an allowance. Money that remains after you have paid for
regular or needed expenses is called discretionary income. As your income and
expenses change, so will your budget. A budget is a working document that
you will want to review often.
Review
Your Knowledge
Circle the correct answer for each of the following.
1. You can track your expected income and expenses for a given period
using a(n)
A. fi nancial goal.
B. investment.
C. budget.
D. defi cit.
2. You paid $12.50 for a new music CD. This amount represents a(n)
A. income.
B. expense.
C. goal.
D. charge.
3. Last week, you paid $4.50 for lunch on Monday, $3.00 for lunch on
Tuesday, and $2.75 for lunch on the other weekdays. The amounts you
paid for lunch are
A. fi xed expenses.
B. variable expenses.
C. discretionary expenses.
D. discretionary income.