Which one of the following statements best describes a budget "blind spot"?
A. Too little money was set aside to cover an expense.
B. This is an expense the person overlooked or did not account for when setting up the budget.
C. This is an item that requires periodic payments rather than monthly payments.
D. "Blind spot" is another name for Miscellaneous in the list of budget items.
B.
http://www.getrichslowly.org/blog/2010/06/10/finding-your-financial-blind-spots/
The correct answer is B. A budget "blind spot" refers to an expense that the person overlooked or did not account for when setting up the budget. It is something that was not anticipated or considered while planning the budget.
To understand this concept, let's break it down:
When creating a budget, one typically takes into account various expenses, such as rent, utilities, groceries, transportation, and other regular monthly payments. However, there may be certain expenses that are not part of the regular monthly bills or were simply forgotten.
For example, if someone forgot to include a yearly subscription fee for a service they use, such as a membership or a software renewal, then that expense would be considered a budget blind spot. It is something they didn't think about or factor into their budget planning.
Identifying budget blind spots is important because it helps individuals or households ensure that they have accounted for all necessary expenses and can avoid unexpected financial strain. To avoid budget blind spots, it's a good idea to thoroughly review past expenses, consider upcoming events or obligations, and anticipate any irregular or intermittent costs that may arise. Regularly reviewing and updating your budget is crucial to ensure that all expenses are accounted for and to prevent any surprises.