ECONOMICS
BUDGETING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
True
|
|
|
False
|
|
|
Either A or B
|
|
|
None of the above
|
Detailed explanation-1: -When you pay yourself first, you pay yourself (usually via automatic savings) before you do any other spending. In other words, you are prioritizing your long-term financial well-being.
Detailed explanation-2: -The rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must-have or must-do. The remaining half should be split up between 20% savings and debt repayment and 30% to everything else that you might want.
Detailed explanation-3: -Budget. A plan that outlines what money you expect to earn or receive (your income) and how you will save it or spend it (your expenses) for a given period of time; also called a spending plan.
Detailed explanation-4: -A pay-yourself-first method reinforces a savings-focused mentality. Rather than accounting for all of your daily expenses and then seeing what, if anything, you have leftover for your savings goals, you’re prioritizing those long-term goals first and making sure that they don’t slip through the cracks.