Foundations in Personal Finance - Chapter 3 Test

Which of the following is a consequence of overdrawing your checking account?

• Bounced check fee from the store

• Stress from money mismanagement

• Overdraft fee from your bank

• All of the above

Doing a budget does not:

• Show if you are overspending in an area

• Make overspending more likely

• Remove guilt and shame sometimes associated with a purchase

• Make your money go further

Your monthly budget should include:

• Variable expenses

• Discretionary expenses

• Fixed expenses

• All of the above

Which of the following statements is false?

• A cash flow statement summarizes all of the income and outgo (spending) over a certain time period.

• A budget is a written plan for saving and spending.

• A budget is meant to summarize the saving and spending that has taken place over the past year.

• The cash flow statement is reflective of what has already taken place.

Which of the following is something that a typical millionaire would do?

• Lease a new car

• Spend less money than he or she makes

• Replace things that are not broken

• Carry debt

Rent is a:

• Fixed expense

• Variable expense

• Discretionary expense

• Intermittent expense

Eating out is a:

• Fixed expense

• Variable expense

• Discretionary expense

• Intermittent expense

Car repairs are a:

• Fixed expense

• Variable expense

• Discretionary expense

• Intermittent expense

Groceries are a:

• Fixed expense

• Variable expense

• Discretionary expense

• Intermittent expense

A written budget, if followed, removes from your finances.

• Overspending

• Guilt

• Management by crisis

• All of the above