When managing your personal finances, you should always make sure you have a _____ to help track your income and expenses.

• A. credit line
• B. credit card
• C. budget
• D. direct deposit

Answer: (C)

Verified step by step guidance

1. Understand the concept of a budget: A budget is a financial plan that helps individuals or organizations track their income and expenses over a specific period. It is essential for managing personal finances effectively.
2. Identify the purpose of a budget: The primary purpose of a budget is to ensure that your expenses do not exceed your income, allowing you to save, invest, and avoid financial difficulties.
3. Compare the options provided: Evaluate each option (credit line, credit card, direct deposit) and determine whether they help track income and expenses. None of these options serve the purpose of tracking finances like a budget does.
4. Recognize why a budget is the correct answer: A budget provides a structured way to monitor and control financial activities, making it the most suitable tool for managing personal finances.
5. Apply this knowledge to personal finance management: Create a budget by listing all sources of income and categorizing expenses (e.g., fixed, variable, discretionary). Regularly review and adjust the budget to ensure financial goals are met.