Financial planning

Does financial planning have no secrets for you? Put your knowledge of financial planning to the test and find out how you can manage your budget correctly and draw it up in the best possible way.

The word budget comes from the French bougette, which means purse. But what does to make a budget mean?

Correct answer A. To keep a list of expected income and expenses to understand your capacity to save.

A budget is a list of planned income and expenditure over a period of time. Putting together a budget means understanding which expenses are important and planning them accordingly based on what we have available and what we receive regularly, i.e. with respect to our income.

Which of these reference periods doesn't fit with the idea of a budget?

Correct answer A. Daily.

Budgeting means planning and organizing income and expenditure over time, which is why it makes little sense to take 24 hours as the reference period. Planning is very important in order to deal with everyday choices in an informed way.

The first step is to determine the reference period (week, month, year) and identify all your income and expenditure. In other words, how much you earn and how much you plan to spend in the given time frame.

Which of the following is the correct definition of ordinary expenses?

Correct answer A. Expenses that recur periodically and can easily be calculated each month.

They include, for example, expenses for food, transport, petrol, but also mortgage payments and house rent.

Extraordinary expenses are incurred occasionally, for example, the purchase of a new television or a family trip. They should be converted into monthly expenses.

What is the main purpose of planning?

Correct answer A. Checking the sustainability of expenses, i.e. the balance between income and outgoings.

The main purpose of financial planning and the use of a budget plan is to check the sustainability of expenses, i.e. the balance between income and outgoings. It's important to be consistent on the one hand and on the other, to check and, if necessary, update the forecasts made: we often have a tendency to underestimate expenses and overestimate income.

Imagine that you are drawing up an income and outgoings plan (budget) for the coming month. Based on what you spent last month, you are jotting down all your upcoming expense items. Which of these should not be included?

Correct answer A. Annual theatre membership.

For the correct preparation of a monthly budget, you have to consider all thw recurring expenses each month. For extraordinary or even recurring expenses, but which are not monthly, you have to calculate the portion pertaining to the month (if the theatre membership is for one year, you have to divide the total by the 12 months of the year, i.e. consider one twelfth of the amount paid).

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