Chp 7

Question 1

What must you do every month?

Answer 1

do a written cash flow plan

Question 2

what must you do with your checkbook?

Answer 2

keep it balanced

Question 3

What are overdrafts a sign of?

Answer 3

crisis living, sloppy lazy money habits

Question 4

What are sure to become budget busters if not managed properly?

Answer 4

ATM card, Debit card

Question 5

Why do people hate the word budget?

Answer 5

it has a straight jacket connotation
it has been used to abuse them
the budget has never worked
fear of what they will find.

Question 6

Why do cash flow plans not work?

Answer 6

people leave things out
overcomplicate the plan
don’t actually do it
don’t live on the budget

Question 7

What will a written plan, if lived and agreed on remove?

Answer 7

money fights
guilt, shame, and fear with buying necessities
overdrafts from life, and stress
overspending in certain areas.

Question 8

What is the easiest and most powerful plan?

Answer 8

zero-based budget plan using an envelope system

Question 9

how long does it take to get a budget right?

Answer 9

3-4 months

Question 10

how do you budget with an irregular income?

Answer 10

make a list of all expenses
prioritize the list by importance
spend your money on the way down the list till you reach zero.

Question 11

What are lump sum payments?

Answer 11

payments on a non-monthly basis (taxes, insurance)

Question 12

What must you do with lump-sum payments?

Answer 12

annulize the cost. convert the total cost into monthly payments

Question 13

What should happen in a monthly cash flow plan?

Answer 13

every single dollar of your income should be allocated to some category.

Question 14

What things should you not forget to add to your budget?

Answer 14

clothes, car repairs, home improvements

Question 15

What should you do if one of your categories is coming up short for several months?

Answer 15

adjust the budget amount the next month

Question 16

what is the recommended amount for food?

Answer 16

5-15%

Question 17

What category should have the most percentage of your pay?

Answer 17

housing

Question 18

What does an allocated spending plan do?

Answer 18

it comes after you’ve done a monthly cash flow plan and allocated the rest of your money from each pay period.

Question 19

What do the 4 columns on an allocated spending plan represent?

Answer 19

4 weeks in a given month

Question 20

How do you allocate expenses in an allocated pay plan?

Answer 20

add them to a specific payday column using bill dues to guide you.

Question 21

How do you fill out an allocated spending plan?

Answer 21

write down pay periods, allocate money to specific categories based on bill dues, subtract each category as you go down the list till you reach zero.

Question 22

How do you fill out a monthly cash flow plan?

Answer 22

fill in monthly expenses under subcategories, add them up in total. use actually spent to record what you really spent to see needed adjustments and record what percentage of pay goes into this category.

Question 23

What should you not use if you have an irregular income?

Answer 23

allocated spending plan

Question 24

What should you still use even with an irregular income?

Answer 24

monthly cash flow plan

Question 25

How should you fill out an irregular income form?

Answer 25

prioritize expenses by importance, write down the amount for each expense and the accumulative amount in the second column.