Chapter 2 Personal Financial Planning Review

A ________ is a plan for the use of money over time based on goals, expenses, and expected income

• lifespan

• budget

• income

• expense

Allowance, a paycheck, gifts and gains from an investment are examples of ______.

• income

• expenses

• wealth

• philanthropy

5. Which one of these expenses most likely represents a VARIABLE cost in someone's budget?

• Gas

• Rent

• Car insurance premium

• Student Loan payment

Monthly rent payments are an example of a(n) _____ expense.

• fixed expense

• variable expense

• discretionary expense

• emergency expense

When putting together a budget, which of the following items should you include?

• Fixed Expenses.

• Discretionary Expenses.

• Savings

• All of the above.

How do you calculate net worth?

• Total assets - Total liabilities

• Total assets + Total liabilities

• Fixed Expenses + Variable expenses

• Cash inflow - cash outflow

In the 50/30/20 budget, _____% of your budget should be for wants.

• 20%

• 30%

• 50%

• 100%

Every month Jessica is overspending in her budget and decreasing her savings account as a result. What action would you recommend to Jessica?

• Write a new lease for 25% less

• Stop paying her credit card bill and put it in savings

• Start packing her lunch instead of dining out

• Quit her job and look for a better one

Beginning, expanding, developing, launching and aging are the stages in the ______________________.

• personal financial crisis

• personal financial planning

• family life cycle

If you make $2,000 per month and budgeted $1,000 for fixed expenses and $500 for variable expenses, how much discretionary income will you have?

• $200

• $1000

• $500

• $400