Budget and Emergency Fund

Why is having a fully funded emergency fund so important when it comes to your financial well-being?

• As long as you have a good-paying job, you really don’t need am emergency fund

• The purpose of an emergency fund is to set money aside for unexpected financial emergencies and to provide a sense of financial security.

• The purpose of an emergency fund is to have money set aside so that you never make large purchases, like vacations.

How can keeping a record of your spending help you make a budget?

• It can help identify how much you spend on wants.

• It can help identify what you spend on needs.

• It can help you see patterns of spending that are not necessary.

• all of these are true

Tony Michael budgeted $4,550 to buy a used car for his son, Trey. He spent $6,788. How much more or less is the amount spent than the amount budgeted?

• $2,238 less

• $2,338 more

• $2,238 more

• $2,338 less

Good recordkeeping requires that you keep an accurate record of how you spend your money.

• True

• False

To budget for the unexpected, you should include an emergency fund.

• True

• False

_________ are things you have to have. ___________ are fun but not necessary to survive

• Wants; Needs

• Budget; Scarcity

• Needs, Wants

• Assets, Liabilities

All of these are "NEEDS" EXCEPT:

• BUS FARE

• MOVIE TICKETS

• RENT

• GROCERIES

Lola is saving for a vacation. Based on the budget numbers here, how much can she put in her vacation account this month?

• $32.00

• $48.00

• $112.00

• $128.00

Alex's budget shows a problem. His weekly expenses average $10 more than his earnings. Alex works 5 days a week and every day on his way to work, he spends $2.50 on hot chocolate. Will cutting out the hot chocolate help Alex balance his budget?

• Yes, and he will have some money left over

• Yes, the amount he saves will balance his budget exactly.

• No, Alex will have to find other places to cut.

Gabby wants to buy a new dishwasher that costs $500. She has already saved $100. She earns $1,200 a month and her total monthly expenses come to $1,000. Gabby is going to put all of her extra money each month into her savings account for the dishwasher. Assuming her expenses stay the same, how long will it take Gabby to save enough money for the dishwasher?

• three months

• Two months

• five months

• one month