Financial Planner

Category - General Principles of Financial Planning

When budgeting, what is an important step that many individuals miss?
  1. Estimating income
  2. Breaking down expenses between discretionary and non-discretionary
  3. Considering methods to increase income
  4. Considering methods to decrease expenses
Explanation
Answer: B - Many people consider ways to increase income and decrease expenses. However, many individuals do not break down expenses between discretionary and non-discretionary first. This is an important step because it shows exactly what expenses can and should be reduced or eliminated first.
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