Budgeting 101: Is your house in order?
by Staff
Creating a household budget allows you to spend your money more effectively so you have enough to cover the things you need and want the most. See if your budgeting know-how could add up to financial success.

What should be your first step in creating a household budget?

  • categorize your spending
  • define your financial goals
  • make a spending plan

What should you always include in your household budget?

  • an escape clause
  • an investment plan
  • flexibility

In the budgeting process, how should you think of savings?

  • as a necessary evil
  • as a planned expense
  • as whatever's leftover

If your budget is in the red, what action should you consider?

  • increasing your income
  • trimming your expenses
  • both of these

If you lose your job, you'll have to abandon your budget.

  • true
  • false

In the 50/30/20 system of allocating spending, which of these are not "Must-Haves"?

  • housing
  • transportation
  • savings

According to the 50/30/20 system, when your budget is in the red, where should you look for spending cuts?

  • Must-Haves
  • Wants
  • both

How much does the average American spend on apparel each year?

  • $650
  • $1,700
  • $4,800

The whole point of budgeting is to spend money on what you need, not on what you want.

  • true
  • false

In the 50/30/20 system of budgeting, to which category do you allocate 20 percent of your income?

  • Savings
  • Luxuries
  • Must-Haves

What should your attitude be when you approach the budgeting process?

  • grim
  • wary
  • positive

How much does the average American spend on entertainment annually?

  • $2,500
  • $4,800
  • $11,200

A well-planned garden can save you how much on food bills every year?

  • $50
  • $250
  • $500

What is the most important role of a household budget?

  • to alert you to overspending
  • to help you at tax time
  • to show you your weaknesses

How much does a typical family of four spend on food each month?

  • $456
  • $789
  • $996

What percentage of income does the average household spend on transportation?

  • 11 percent
  • 16 percent
  • 26 percent

The virtual envelope system of budgeting helps you to do what?

  • transfer money easily from one envelope to another
  • spend only what's allotted for a particular expense category
  • group all your assets into envelopes

How much has the cost of rearing a child increased in the past 50 years?

  • 2 percent
  • 8 percent
  • 22 percent

How many credit cards does the average consumer have?

  • only one
  • about three
  • more than six

Money-management software can help you budget by doing what?

  • making the process of creating a budget easier
  • preventing you from spending more than you budget
  • deciding how much you should spend in each category