ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -everyone needs a budget, no matter if they’re up to their eyeballs in debt or swimming in millions of dollars in cash. A budget is how you keep track of your money and make sure you’re in the driver’s seat of where it’s going. It helps you with all your financial goals-especially paying off debt.

Detailed explanation-2: -Another common reason people do not budget is because they feel too broke to budget. It can be scary to write down all the money you have going out each month and realize that you do not have enough cash flow to cover it. Many people forgo a budget and simply hope that things will magically work out.

Detailed explanation-3: -Answer and Explanation: Option (a) is the correct answer. The last step of a master budget is the budgeted balance sheet, not the budgeted income statement, so it is a wrong statement.

Detailed explanation-4: -We recommend the popular 50/30/20 budget to maximize your money. In it, you spend roughly 50% of your after-tax dollars on necessities, no more than 30% on wants, and at least 20% on savings and debt repayment. We like the simplicity of this plan.