Financial Literacy Assessment #2

The definition of a budget is...

• money received on a regular basis for work

• money spent on a good or service

• a plan to manage income or expenses or a time period

• a plan to manage a variety of investments over a period of time

What is an income?

• money spent on a good or service

• money received from work on a regular basis

• money you receive as a loan from the bank

• money that you spend on friends and family

An expense is...

• money received on a regular basis for work

• money given to a friend as a loan

• money received from a bank every week

• money spent on goods or services

Harry wants to start saving some money every month. What is the recommended percentage of money Harry should save?

• 5%

• 10%

• 15%

• 20%

Hermione wants to give some of her money to charity. What percentage of Hermione's income is recommended that she give?

• 80%

• 15%

• 20%

• 10%

Ron just received his first paycheck. He wants to be smart with his money. How much is recommended that Ron spend on expenses?

• 80%

• 70%

• 10%

• 20%

Lily gives herself a monthly clothing budget of $100 every month. In the month of April, she bought only a pair of pants for $40. Did Lily use her money wisely AND why?

• Yes, she still has money left over for the month.

• No, she spent too much on one item.

James allocates a budget of $60 for going out to eat every month. He went out to eat with 3 friends and paid for their bill. Each person's meal cost around $25. Did James use his money well this month? Why or why not?

• Yes, he had plenty of money left over for the month.

• No, he spent too much money and did not have any leftover.

You have an income of $300 in one month. How much money would you put away for savings in one month?

• $40

• $30

• $50

• $20

Which financial tool is less risky because of the variety of investments?

• mutual fund

• savings tool

• savings bond

• CD