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QuizMultiple Choice

3.11 Budgeting

Question 1 • Personal Finance - EL3403

From what part of income should someone take savings?

Answer
w
what otherwise would be fixed expenses
g
gross income, before other deductions
w
what otherwise would be discretionary income
g
gross income, along with other deductions

Explanation

Savings should generally come from income that would otherwise be available for discretionary spending, such as entertainment or nonessential purchases. Fixed expenses are necessary commitments, and gross income is reduced by taxes and other deductions before it becomes spendable income. Therefore, the best choice is “what otherwise would be discretionary income.”

AI-written and checked against the verified answer.

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