Budgeting is an important tool for saving. First, you need to segregate all your income and expenses. Now, categorise 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 expenses. Ensure that your income exceeds the expenses with as wider 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 thinking about investment.

According to the passage, which of the following sequences correctly represents the order of steps for managing personal finances?

Question

Budgeting is an important tool for saving. First, you need to segregate all your income and expenses. Now, categorise 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 expenses. Ensure that your income exceeds the expenses with as wider 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 thinking about investment.

According to the passage, which of the following sequences correctly represents the order of steps for managing personal finances?

Accepted Answer

**Solution:**

1. The passage emphasizes that the first step in managing finances is to create a **budget** by categorizing income and expenses.

2. After budgeting, the goal is to ensure that income exceeds expenses, resulting in a **saving**.

3. Only after securing savings should one consider **investment**.

Thus, the correct order of steps is: **Budgeting → Saving → Investment**.

**Answer:** (c) Budgeting - Saving - Investment

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