Chapter 6 Review

The most common time frame individuals use when developing a budget is __________.

• Daily

• Weekly

• Monthly

• Yearly

If you have a budget deficit and are trying to distinguish between needs and wants in your budget, which question is MOST helpful?

• Will there be a bad consequence if I don't buy this item?

• Do all of my friends have this item?

• Will this item last more than one year?

• Does this item make me happy?

In which scenario below would an unlimited data plan on your smartphone be best classified as a NEED?

• If it allows you to check email and get updates on Twitter during class

• If you don't have wifi at home and it allows you to complete homework assignments

• If it gives you the ability to use a mobile wallet instead of a debit or credit card

• If it keeps you entertained by allowing you to stream videos anywhere

How can the college you choose to attend impact your future adult budget?

• Any student loans you owe will become a necessary expense in your budget

• Students who attend more expensive colleges earn more income once they start working

• The budget you create during freshman year will be the same budget you use until age 30

• Your scholarship money will impact your taxes for years to come

How are savings and budgeting related?

• Once you save enough money, you will no longer need to budget

• A good budget will help control your spending and enable higher saving

• The more money you save, the higher amount of income you will have available to spend

• Saving is the final amount of money you have leftover in any monthly budget

How can completing a budget be beneficial to your health?

• A budget reduces your insurance premiums, making it easier to get access to health care

• A budget reduces the mental and emotional stress of never knowing if you'll have enough to cover expenses

• A budget increases your income, letting you spend more on healthy foods, gym memberships, etc.

• A budget increases your heart rate, cholesterol, and other health metrics

Which of these typically represents a fixed cost in a monthly budget?

• Rent or mortgage

• Car maintainence

• Dining Out

• Groceries

Net wealth is best defined as...

• The value of your home, car, and investments

• The total of all of your assets minus the total of all of your debts

• Reaching the top 10% of all households in the US

• Your monthly income minus your monthly expenses

If you are following a 50/30/20 Budget, what two items fall into the 20 category?

• Wants & needs

• Saving & debt repayment

• Income & expenses

• Fixed & variable costs

Why is Zero-Based Budgeting called Zero-Based Budgeting?

• Your checking account balance goes to $0 every month

• It's the best budget to use if you currently have $0 in your savings account

• Your budget's income and expenses total to exactly $0, so every dollar is accounted for

• It requires 0 knowledge of budgeting skills to achieve this type of budget