AFA Budgeting

Budgeting

Multiple Choice

Which of these is an example of a fixed expense?

• The ice cream cone you buy on Wednesdays after school

• The gas you fill up your car with every week

• The groceries you buy every month

• The insurance premiums you pay every month

Multiple Choice

Which piece of advice about budgeting for variable expenses is most useful?

• Aim to reduce your variable expenses to $0 on your budget because they are always “wants”

• Track your variable expenses for a few months to find your average monthly costs

• Do NOT budget for variable expenses, since they only make 5% of total spending on average

• Focus on budgeting for fixed expenses because they are easier to change

Multiple Choice

Your apartment rent, tickets to a concert, a pepperoni pizza, and your cell phone bill are all examples of…

• Wants

• Needs

• Income

• Expenses

Multiple Choice

Which one of these expenses most likely represents a VARIABLE cost in someone's budget? (meaning that it could change from month to month)

• Electricity bill

• Rent

• Car insurance premium

• Student loan payment

Multiple Choice

For two months in a row, Aaron realizes he has a budget deficit of roughly $175. Which of these options makes the most sense for him to fix his problem?

• Cancel one of his streaming video subscriptions and go out to dinner three fewer times each month with friends

• Start paying just the minimum monthly payment on his student loan and credit card debt, instead of the extra he's been contributing

• Contribute $100 less to savings each month and $75 less to his retirement fund

• Sell his current car and get a less expensive vehicle

Multiple Choice

When making your budget, you realize that you will not earn enough money to cover all of your expenses. All of the following are suggested ways of balancing your budget, EXCEPT...

• Getting a roommate to share housing expenses

• Borrowing money from your friends every month to make up the difference

• Spending less on food by eating out less and buying in bulk

• Reducing transportation costs by using public transportation instead of owning a car

Multiple Choice

If you are trying to substantially reduce the amount you spend on food, you should try...

• Cooking your own food at home for as many meals as possible

• Dining at restaurants more often so you don't waste water doing dishes

• Eating more snacks on the go and way fewer meals at home

• Drinking more coffee and soda so you are not as hungry for food

Multiple Choice

Janine is considering what auto costs she is going to have after buying a new car. She has budgeted enough money for the monthly auto loan payment, gas, and auto insurance. Has Janine factored in all of the costs associated with car ownership?

• Yes, these are the three costs she should expect to pay once she is a car owner

• No, she does not need to include the cost of auto insurance as it is included in her auto loan payment.

• No, she needs to factor in other costs such as maintenance, emergency repairs, etc.

• No, she does not need to include the cost of gas as it is covered under her auto insurance policy

Multiple Choice

Which statement accurately describes how the 50/20/30 Rule would break down your take-home pay?

• 50% on wants, 20% on saving, and 30% on needs

• 50% on saving, 20% on needs, and 30% on wants

• 50% needs, 20% on saving, and 30% on wants

• 50% on saving, 20% on wants, and 30% on needs

Multiple Choice

If Jugo makes $6000 per month in take-home pay and utilizes the 50/30/20 method of budgeting, how much would he be putting toward his wants every month?  

• $1200

• $1800

• $3000

• $3000

​GAS

​Restaurants

​Groceries

​Vaca

​Christmas

​Birthdays

Rent

Insurance

​AT&T

​Discretionary

Multiple Choice

Which statement best describes the main function of using the cash envelope system of budgeting?

• You keep your savings in an envelope instead of at a bank or credit union so your money has greater protection against theft

• You put each of your fixed expenses into an individual envelope so you know how much to pay every month

• You only accept cash as income so you can avoid paying state and federal taxes on your earnings

• You allocate your spending cash for wants into labeled envelopes so you are spending intentionally and sticking to your budgetsdfdf

​Net income - expenses = savings (varies monthly)

Multiple Choice

Which description is most accurate for a Zero-Based Budget?

• You put every dollar of your net pay into a budget category each month

• You spend your checking account balance down to $0 every month

• You spend your saving account balance down to $0 every month

• You pay every one of your debts down to $0 every monthzbb

Multiple Choice

On the first day of every month, Raina sits down at her computer, builds a spreadsheet, and allocates all of her income toward expenses or saving. There’s no dollar that is unaccounted for in her budget. Which strategy is Raina using?

• Cash envelope system

• 50/30/20 budgeting

• Zero-based budgeting

• Expense management

Multiple Choice

Isaiah has a summer internship at a technology company and is paid $3,000. After Federal and state taxes, Social Security, and Medicare are deducted, his take-home pay is $2,500. Which of the statements below is correct?

• His gross pay is $2,500 and net pay is $3,000

• His gross and net pay are $3,000

• His gross and net pay are $2,500

• His gross pay is $3,000 and net pay is $2,500

Multiple Choice

You earn a salary of $40,000 per year and decide to save 20% of your gross pay. You set a goal of creating  a $16,000 emergency fund. How long will it take for you to achieve your goal?

• 6 months

• 1 year

• 2 years

• 3 years