Directions (5-7): Read the following paragraph and answer the question as directed. Budgeting is an important tool for saving. First, you need to segregate all your income and expenses. Now, categorize your expenses as least important, important, and very important to prioritise them while

Question

Directions (5-7): Read the following paragraph and answer the question as directed. Budgeting is an important tool for saving. First, you need to segregate all your income and expenses. Now, categorize your expenses as least important, important, and very important to prioritise them while settling them through your income, which is limited. Try to figure out ways in which you can increase savings. Ensure that your income exceeds the expenses with as wide a margin as possible. The surplus fund after meeting all the expenses would be your saving. It is only after you have assured savings that you can think about investment. Which of the following is the correct chronology of steps as can be inferred from the passage?

Accepted Answer

Budgeting-Saving-Investment. The passage says you should first budget by segregating income and expenses and prioritizing them. After that, the surplus becomes saving, and only after savings are assured should you think about investment. So the correct order is Budgeting-Saving-Investment.

Solution

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