Final Review - F21

Which of the following best describes discretionary spending?

• Discretionary spending refers to the money available after taxes are removed and any mandatory obligations have been covered.

• Discretionary spending is the same as net income.

• Discretionary spending refers to the money that must be paid.

• Discretionary spending refers to the money spent at a person’s own discretion, specifically on food or entertainment.

What is the key to long-term budgeting success?

• Establishing the budgeting habit first, then adjust the spending habits

• Monitoring spending and adjust it as appropriate

• Adjusting spending habits then set a budget based on the adjustments

• Including bills in budgeting plans

The budgeting process includes three important aspects. Which of the following describes the most important aspect?

• Categorizing spending needs because they must be a top priority

• Categorizing spending wants because they result in dangerous spending

• Assigning limits to categories because budgets are built on limitations

• Committing to the limits and categories decided on

Which of the following is a fixed expense?

• Mortgage Payment

• Groceries

• Gasoline

• Entertainment

Which of the following is a variable expense?

• Rent

• Cable/Internet

• Gasoline

• Loan Repayment

Which of the following is a major advantage that comes from paying for things with cash?

• Spending is limited to available cash.

• Excessive spending is more likely to occur if a larger bill must be broken for a minor purchase.

• People tend to buy more things when using cash.

• If a person runs out of cash, she can easily make a withdrawal at an ATM.

Which of the following is a common non-monthly expense that could be included in a monthly budget?

• Electric bill

• Rent

• Gasoline

• Car Maintenance

Which of the following is not considered a type of college financial aid?

• Federal Pell Grants

• Subsidized loans

• Job reimbursements

• Personal savings

All of the following are true about why it is important to complete the FAFSA process EXCEPT:

• It allows you to be eligible for federal student aid.

• It allows you to be eligible for early admission.

• It allows you to be eligible for some grants.

• It allows you to be eligible for many scholarships.

When calculating Return On Investment (ROI), first find the benefit. Which of the following best describes the benefit?

• The total amount of money made on a deal

• The amount of money made after paying back the initial investment

• The amount of money put into an investment to begin with

• Revenue