The Art of Budgeting

For a budget to work, money coming in (income) must equal money going out (expenses).

• True

• False

You are in a clothing store and like a pair of pants and a T-shirt. You only have enough money for one item of clothing. You decide to buy the T-Shirt. What is your opportunity cost?

• the pants

• the T-shirt

• pants and T-shirt

• none are correct

Rent/mortgage payment

• Fixed Expense

• Variable Expense

paying for an amusement park ticket

• Fixed Expense

• Variable Expense

buying crocs

• Fixed Expense

• Variable Expense

phone bill

• Fixed Expense

• Variable Expense

Jackie is 30 years old, married, and has 2 kids ages 8 and 6. Her income is $40,000 net pay. How much should she try to set aside for an emergency fund?

• $9,500

• $20,000

• $40,000

• $80,000

According to the 50-30-20 rule, %50 of a person’s income should be spent on . . .

• fixed expenses

• variable expenses

• savings

According to the 50-30-20 rule, %30 of a person’s income should be spent on . . .

• fixed expenses

• variable expenses

• savings

According to the 50-30-20 rule, %20 of a person’s income should be spent on . . .

• fixed expenses

• variable expenses

• savings