Budgeting

What is the definition of the term "budget"?

• The amount of money you have in the bank.

• The amount of money available for a specific purpose.

• The amount of money you have in investments.

• The amount of money you save to pay taxes.

In the "70-20-10" formula, the "10" is the percentage of your income used to

• pay for education

• to invest in savings

• to pay off debts

• to invest in a home

What do "living expenses" include

• college tuition

• food

• rent/housing

• cable and internet

In the "70-20-10" Rule, for the 20%, the first 10% should go towards

• education

• taxes

• retirement

• personal expenses

In the "70-20-10" Rule, the "10" is the percentage for debt repayment. What is included in debt repayment?

• car loans

• college loans

• credit cards

• all of the above

The first step in financial planning is

• setting up a personal budget

• setting aside money for taxes

• paying off all credit cards

• none of the above

The first step in setting up a personal budget is

• calculating monthly income

• calculating monthly expenses

• monitoring your personal expenses

• none of the above

What should you do when your expenses exceed your income?

• Borrow money from a friend.

• Take out a loan.

• Do nothing. See what happens in the next month.

• Adjust your personal budget.

What is "net income"?

• gross income minus deductions

• wages minus taxes

• gross income minus wages

• gross income minus investments

Most employees have their pay sent to their banks through