Spring 2025 EPF Test 2 Honors

Front

What is the maximum percentage of your monthly net income that should go towards monthly mortgage payments, including insurance and tax, according to the 20/10 Rule?

Back

30%

Front

According to the 20/10 Rule, what types of debt should be kept below 20% of your yearly net income? Options: Mortgage only, Credit card, student loan, and mortgage, Credit card, student loan, car loan, and personal loan, Car loan and personal loan only

Back

Credit card, student loan, car loan, and personal loan

Front

After reviewing your expenses and income, what is the next step in managing debt repayment?

Back

Recognize spending leaks and stop them

Front

Which of the following is a recommended strategy for reducing spending?
Options:
Reduce spending abruptly,
Reduce spending gradually,
Increase spending on non-essentials,
Do not monitor spending habits

Back

Reduce spending gradually

Front

What is a suggested action to take regarding your home environment to help manage debt? Options: Increase the heat/cool to maximum levels, Never clean or organize your home, Rent out a room in your house

Back

Turn down the heat/cool a bit (but stay comfortable and healthy)

Front

How can you reduce waste and manage debt according to the suggestions?

Back

Watch groceries spoilage and waste

Front

After paying off the debt with the highest interest rate in the debt avalanche strategy, you .

Back

Pay off the debt with the next high

Front

What is the purpose of debt consolidation?

Back

To combine multiple old debts into a single new one, ideally at a lower interest rate.

Front

What can a non-profit credit counseling agency help you set up?

Back

A debt management plan to cut your interest rate and create a repayment plan

Front

Which of the following budget categories is recommended to allocate 25-35 percent of your budget? Food, Housing, Utilities, Recreation & Entertainment

Back

Housing