Budgeting

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

• 5 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.

• You pay more than the minimum monthly loan payment towards your student loans.

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?

• There are several public transportation routes between Greg's apartment and work. 

• 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.

Which of these boxes of cereal has the LOWEST unit price? 

• Cereal A, which costs $3.20 for a 16 oz. box.

• Cereal B, which costs $5.00 for a 32 oz. box.

• Cereal C, which costs $2.50 for a 10 oz. box.

• Cereal D, which costs $4.50 for an 8 oz box

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 deficit of $2,625

• 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?

• 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.

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

• When comparing similar products, be sure to compare based on unit price.

John wants to buy a car and is trying to decide whether he wants to accept a pre-qualified auto loan from his credit union or if he wants to directly finance the car from the dealership. What should he do? 

• Finance the car directly with the dealership since they always have better interest rates.

• Finance the car with the credit union - since they’re a local organization, they always have the customers’ best interests at heart.

• Compare the two offers and choose the one with the longest term so that he has more time to pay it off

• Compare the two offers and choose the one through which he’d pay the least amount of money overall.

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

• Bedroom furniture

Danaisha does all her grocery shopping at organic markets and has a monthly grocery bill of $325. Charles says that Danaisha is wasting her money on wants instead of focusing on needs. He buys in bulk, uses coupons, and shops at Save-More for a monthly bill of $195. Who's budgeting correctly for food?

• Danaisha, because she is focusing on her health, which will have a guaranteed payoff in the long run. 

• Charles, because he's taking efforts to save money by focusing on his needs only.

• Both, because needs vs wants are determined on an individual basis.

• Neither, because they should meet in the middle somewhere. Charles should focus more on health, and Danaisha should cut her spending.

Ming is excited to start looking for an apartment. She knows that you just learned about renting an apartment and gives you a list of steps she thinks she should take to find the right fit for her. Which of the following steps would you recommend she can SKIP when doing her INITIAL research?

• Ask the leasing office what color the room is painted to make sure that she is comfortable with the look and feel of the room

• Find out if she would be living with roommates, and if so, how many

• Research the cost of utilities

• Find out how long it would take her to go to work and other places she goes to frequently