PFL Final Exam Review

Front

Aaron realizes he has a budget deficit of roughly $175 at the end of two months in a row. Which of these options makes the most sense for him to fix his problem? Cancel his cable TV subscription and go out to dinner three fewer times each month with friends. Contribute $100 less to savings each month and $75 less to his retirement fund. Start paying just the minimum monthly payment on his student loan and credit card debt, instead of the extra he's been contributing. Sell his current car and get a less expensive vehicle.

Back

Cancel his cable TV subscription and go out to dinner three fewer times each month with friends.

Front

Needs can be defined as basic shelter, basic clothing, and basic food. All the things outside those categories are wants. True or False?

Back

True

Front

Samantha has difficulty understanding the difference between wants and needs - as everything is a need! All of the following EXCEPT which question will be helpful to ask herself if it's a need or not?
- How much do I want this item right now?
- How am I going to pay for this purchase? If I have to charge it or take out a loan, will I be able to afford the monthly payment?
- Is there a less expensive version or can I buy it used?
- How many hours of work would it take me to pay for this item?

Back

How much do I want this item right now?

Front

In your personal budget, what does discretionary spending refer to?

Back

Money left over (or budgeted) once all essential items have been taken care of.

Front

Which of the following is a want, not a need? Grooming and hygiene products, A replacement jacket for the one that you have worn for 10 years and is in need of repair, Unlimited data plan for your smartphone

Back

Unlimited data plan for your smartphone

Front

The MINIMUM amount you have to pay on loans and credit cards is a need, not a want.

Back

True

Front

For the average American, in what category do they spend the highest percentage of their income? Options: Housing, Food, Transportation, Travel

Back

Housing

Front

True or False? The 50/30/20 Rule is the preferred and recommended way that you should think about your monthly budget.

Back

True

Front

Which of the following are the correct allocations of money to the 50/30/20 Rule? Options: 50% Wants, 30% Needs, 20% Savings; 50% Needs, 30% Wants, 20% Savings; 50% Savings, 30% Needs, 20% Needs

Back

50% Needs, 30% Wants, 20% Savings

Front

If I forget to make a payment on my credit card, this mistake will cost me:

Back

7-10 years of it negatively affecting my credit