Image: Justin Sullivan/Getty Images
About This QuizPlanning a budget is one of the best ways to ensure that you make ends meet at all times. A major part of your budget plan will be focused on fixed expenses. But what exactly are fixed expenses and how can you best manage them? Take this quiz to see if you've learned enough to make your budget planning really pay off.
How should you prepare a budget plan if your income varies from month to month?
Base your budget on the lowest amount you expect to make in any month.
If you use the lowest expected monthly income as your base, you can take any surplus from good months and put it in savings.
Use an average of the past six months' income as a base.
Consult with a professional before preparing your budget.
What is an example of a non-fixed expense?
Though your mortgage and car payments remain the same amount each month, your food costs vary.
car loan payments
Which of these household expenses is a fixed expense for most people?
Since most people have a set fee that they pay for cable television each month, this would be considered a fixed expense.
What percent of your income do many budgeting advisers suggest you put into savings?
Maintaining a healthy savings plan can mean the difference in tough financial times. But if you have a lot of fixed expenses, paying them off might be preferable to saving.
What mistake do many people make when using automatic bill payment systems?
forgetting to enter such payments in their checkbook registers
If you forget to input these payments in your checkbook register, you might accidentally go into overdraft. Tracking these expenses in your budget plan can help decrease this chance.
not checking that there were no mistakes
not ensuring that there is enough money in their accounts to cover the bills
What can help you not overlook any fixed expenses when planning your budget?
looking over your prior checkbook entries
By reviewing your recent expense records you may notice some recurring payments that you had originally forgotten.
adding an extra 10% for "miscellaneous fixed expenses"
charting your overall income and expenses for the prior 10 years
What is an easy way to reduce your fixed expenses?
eliminating unnecessary expenses
Some fixed expenses are hard to remove, but if you cut out some of the luxuries you can make an impact. Figure out which of your fixed expenses are real necessities.
transferring your credit card debt to a card with a lower interest rate
creating a budget plan that lists them clearly
What will help ensure that you put money into savings each month?
making it your first post-paycheck expenditure each month
Many people guarantee that they add to their savings each month by setting up an automatic deposit from their paycheck.
setting an automatic reminder on your computer
reducing your fixed expenses
What type of fixed expense typically has a prepayment penalty?
You may consider trying to pay one of your fixed expenses off earlier, if it has no such penalty. If you do, you can free up money for other expenses or savings.
What is a good way to increase your long-term income?
Education will obviously increase your expenses in the short term, and might even reduce your income if it cuts into your work schedule. But it usually will pay off in the long run.
reducing fixed expenses
writing out a budget plan
Justin Sullivan/Getty Images
Image: Justin Sullivan/Getty Images
About This Quiz
Planning a budget is one of the best ways to ensure that you make ends meet at all times. A major part of your budget plan will be focused on fixed expenses. But what exactly are fixed expenses and how can you best manage them? Take this quiz to see if you've learned enough to make your budget planning really pay off.