Budgeting

Putting your budget in an app, on paper, or in a basic chart is essential if you want a healthy financial future. Creating a detailed budget is key to managing your finances. You can understand your spending and identify ways to save or invest money. An accurate monthly budget can help you reach your financial goals, whether you’re saving for a vehicle, handling the costs of education, buying a home, or looking to reduce debt. By sticking to a budget, you can potentially save big each year and avoid overspending.

Budgeting may sound complicated, but it can be a very basic personal finance skill. Whether you decide to make your budget bare bones or super-detailed, the most important part of budgeting is to put it into practice. Tracking your spending is essential to managing your budget.

First, let’s test your budgeting knowledge.

Quick Quiz

Challenge yourself with this short quiz to test your budgeting know-how and sharpen your skills. Whether you’re already a budgeting expert or a beginner with room to improve, take the quiz to find out how to manage money better.

What is the purpose of a personal budget?

Make a plan to organize and manage your money

Figure out how much you have saved for emergencies

Guarantee you earn more

List all of your investments

Correct!

The purpose of a personal budget is to make a plan to organize and manage your money based on how much you earn and spend.

Not quite.

The purpose of a personal budget is to make a plan to organize and manage your money based on how much you earn and spend.

What is an example of a flexible expense?

Rent payment

Internet bill

Groceries

Subscription fees

Correct!

Groceries are a flexible expense and can vary month to month.

Not quite.

Groceries are a flexible expense and can vary month to month.

What kind of expense is a rent payment?

Flexible expense

Unfixed expense

Fixed expense

Preliminary expense

Correct!

A rent payment is a fixed expense because it is based on a particular rate and is due each month.

Not quite.

Your rent payments are based on a particular rate and are due each month.

Disposable income is

Endless money at your disposal

Your income minus your income taxes

Your income divided by your expenses

Money you put toward an emergency fund

Correct!

Your disposable income is the money you have left over for saving and spending after you subtract your income taxes.

Not quite.

Your disposable income is the money you have left over for saving and spending after you subtract your income taxes. Your disposable income is the money you have left over for saving and spending after you subtract your income taxes.

What is the first step in creating a monthly budget?

Determine your average monthly income and expenses

Invest extra funds

Divide your income by your expenses

Open a new deposit account

Correct!

Determining your average monthly net income and expenses is the first step in creating a new monthly budget.

Not quite.

The first step in creating a new monthly budget is to determine your average monthly income and expenses.

Your Score

Nice job!

You’re a big-league budgeter — check out these tips to stay successful.

Nice job!

You’re on the path to becoming a big-league budgeter — check out these resources to become even better at budgeting.

Too Bad!

You’re a newbie with lots of budgeting potential — check out these resources to become a great budgeter.

Budgeting Basics

Evaluating Your Finances

Creating a Budget

Back to Results

Test Your Budgeting Knowledge

5Questions

Featured

Calculators

Emergency Fund

Do you have enough money to cover an emergency? Evaluate your finances to determine how much you should be saving for the unexpected.

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Building Education Fund

Paying for college involves more than tuition. Don't forget about books, materials, housing and food.

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Rework Your Budget

As your finances change, it's important to adjust your budget. Track your current expenses and make adjustments as necessary.

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Saving for a Goal

If you're having a difficult time putting money aside for a trip or a special purchase, determine how much money you need to set aside to meet your goal.

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