Budgeting Unit Test

Which of these costs would be the MOST difficult to adjust if you were looking to reduce your expenses?

• Dining out at local restaurants

• Expenses for new clothes

• Loan payment on a new car

You earn a salary of $40,000 per year and decide to save 20% of your gross pay. You then set a goal of creating a $16,000 emergency fund. How long will it take for you to achieve your goal?

• 6 months

• 1 year

• 2 years

Which of the following is a sign that you have a budget deficit?

• Your savings account balance grows every month.

• You overdraw your checking account on a consistent basis (with a $34 cost per overdraft).

• Your checking account balance grows every month.

Leila just graduated from college and is comparing a few different cities to move to. Which of these factors is the LEAST important thing for her to consider right now?

• The average rent for an apartment

• Employment opportunities

• The average cost of Uber, Lyft, or taxi fare

Greg is trying to decide whether he needs a car or not when he moves to the city. Which of the following would convince Greg to get a car rather than use public transportation?

• The cost of public transportation is less than Greg’s monthly car payment.

• Greg’s company covers half the cost of his monthly public transportation pass.

• Using public transportation, Greg’s commute to work one-way is two hours.

Isaiah works for the summer at a technology company and has a salary for the summer of $3,000. After Federal and state taxes, Social Security, and Medicare are deducted, his take-home pay is $2,500. Which of the statements below is correct?

• His gross pay is $2,500 and net pay is $3,000.

• His gross pay is $3,000 and net pay is $2,500.

• His gross and net pay are $2,500.

You are putting together your first post-graduation budget. Your take-home pay will be $2,500 per month. You estimate your monthly costs to be rent of $900, car related expenses to be $550, entertainment of $200, food expense of $250, cable bill of $75, mobile phone of $100, student loan payment of $400 and other expense of $150. How would you describe your budget after analyzing all of your income and expenses?

• You have a surplus of $125.

• You have a deficit of $125.

• You have a surplus of $2,500.

Which of the following is a BAD budgeting strategy to use if you want to save money at the grocery store?

• When comparing similar products, focus on the price only.

• Prepare a grocery list before you go to the store, and avoid buying items that aren’t on the list.

• Build a weekly meal plan around items you already own or items that are on sale that week, rather than just choosing foods you'd like to eat.

Aaron realizes he has a budget deficit of roughly $175 at the end of two months in a row. Which of these options makes the most sense for him to fix his problem?

• Start paying just the minimum monthly payment on his student loan and credit card debt, instead of the extra he's been contributing.

• Cancel his cable TV subscription and go out to dinner three fewer times each month with friends.

• Contribute $100 less to savings each month and $75 less to his retirement fund.

You're considering moving into a 3 bedroom apartment with 2 roommates, rather than living on your own post-college. Mark which of YOUR expenses would likely decrease by having roommates.

• Groceries and eating out

• Rent

• Cell phone bill