What term can be used to describe the situation where your fixed and variable expenses are higher than your net income.(1 point)
Responses
autonomous consumption
autonomous consumption
saving
saving
negative budgeting
negative budgeting
dissaving
dissaving
The term that can be used to describe the situation where your fixed and variable expenses are higher than your net income is "negative budgeting".
The term that can be used to describe the situation where your fixed and variable expenses are higher than your net income is "dissaving". Dissaving refers to the situation where an individual or a household is spending more than their income, leading to a negative savings rate. This means that they are depleting their savings or accumulating debt in order to cover their expenses.
To determine whether your fixed and variable expenses are higher than your net income, you can follow these steps:
1. Calculate your net income: This is the amount of money you earn after taxes and deductions have been taken out. It includes your wages, salary, and any other sources of income.
2. Calculate your fixed expenses: These are expenses that do not change or vary each month, such as rent or mortgage payments, utility bills, insurance premiums, and loan payments.
3. Calculate your variable expenses: These are expenses that can vary from month to month, such as groceries, transportation costs, entertainment expenses, and discretionary spending.
4. Add up your fixed and variable expenses: Sum up the total amount of your fixed expenses and variable expenses separately.
5. Compare your total expenses to your net income: If your total expenses (fixed + variable) are greater than your net income, then you are in a situation of dissaving, where your expenses exceed your income.
By regularly tracking your income and expenses, you can identify any imbalances between the two and make necessary adjustments to improve your financial situation. This could include reducing expenses, increasing income, or both.