ECONOMICS
BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Possible charitable donations
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Shopping money
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Investments
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Recurring expenses
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Detailed explanation-1: -Start with your spending The first thing to do when establishing a budget is look where you currently spend money. Keep track of all of your expenses for one month, whether they are necessary (rent, groceries, textbooks) or whether they’re for enjoyment (streaming subscriptions, afternoon coffee).
Detailed explanation-2: -Focus on eliminating debt, starting first with the loans with the highest interest rates. Your rent or mortgage payment should equal 25-30% of your income. If you don’t own a home, you may want to work toward saving for a down payment. Aim to save 15% of your income for retirement.
Detailed explanation-3: -Identify recurring expenses first: When budgeting, always ensure to account for all monthly recurring expenditures before accounting for your variable expenses.
Detailed explanation-4: -Calculate your net income. List monthly expenses. Label fixed and variable expenses. Determine average monthly costs for each expense. Make adjustments.