Which statements best summarize the principles you should use when budgeting? Check all that apply.Your discretionary spending should be a higher priority than mandatory spending.You need to be mindful of whether an expense is truly a need, or just a want.Spending on wants will enable needs to take care of themselves.The more you save, the more easily you can reach long–term goals.To create a budget, you need to start by determining your short–term and long–term goals.
Answer
A
Your discretionary spending should be a higher priority than mandatory spending.
B
You need to be mindful of whether an expense is truly a need, or just a want.
C
Spending on wants will enable needs to take care of themselves.
D
The more you save, the more easily you can reach long–term goals.
E
To create a budget, you need to start by determining your short–term and long–term goals.
Explanation
A sound budget distinguishes needs from wants, so you should consider whether an expense is truly necessary. Saving more makes it easier to build toward long-term goals, and setting short- and long-term goals helps guide your budget. Mandatory spending generally takes priority over discretionary spending, and buying wants does not ensure that needs are covered.
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