What does a budget show you?

How much money you plan to come in and go out during the month

How much money you need to earn

How much money you spent last month

Why is tracking your expenses throughout the month important?

It gives you insight into whether you're sticking to the budget you set.

It allows you to delete categories you don't like.

It helps you pull money from your savings to spend in other categories.

It really isn't that important in the long run.

What kind of money counts as income?

All money that you receive, including money from your job and gifts like birthday money

Only the money you make at your job

Only money deposited into your bank account

What is a way to stay accountable to reaching your financial goals?

Finding a person you trust to help keep you on track with your money goals

Hiring a financial advisor to make your decisions about money for you

Looking at the budget you set at the end of the month

Creating specific categories in your budget

A common misconception is that budgeting will keep you from you from having fun, when in reality a budget...

Means there are no rules, you are free to use your money however you want

When is the right time to start creating and living by a budget?

Right now, it's never too early!

When you start researching colleges and the costs that come along with it

Once you have a job with an income

When you decide it's time to buy a car

What should you do if you overspend in one category of your budget?

Adjust your budget by removing money from other spending categories.

Just leave it. It will probably work out fine.

Take money from the Giving category. You're giving to yourself!

Ask a friend for the money you overspent.

What is a good way to make sure you're creating a budget that's realistic?

Check your calendar so you can plan for upcoming monthly expenses.

Make sure you create a budget every single day.

Make sure your budget is perfect before starting. If it isn't just right, don't use it.

Make sure you have enough money in your savings account to pull from if you overspend.

The best way to budget is...

The way that works best for you

What is the envelope system?

It's a method of budgeting that uses envelopes labeled with specific budget categories for your cash.

It's a systematic approach to budgeting with a digital app that organizes categories based on qualitative amounts.

It's a way to budget that involves putting a credit card in each envelope to use for that category.

It's a system that involves writing your entire budget on an envelope.

Why is budgeting so important?

It gives you control of your money and sets you up for financial success in the future.

It's a way to make sure all your money is spent by the end of the month.

It helps you figure out the best way to justify purchases that maybe aren't necessary.

It helps you brush up on your math skills.

SHORT ANSWER QUESTION: List the Four Walls. What priority are those in your budget.

The four walls are: transportation, food, shelter, and utilities. These should come after giving and saving, but before all other categories in my budget.

The four walls are: utilities, college fund, restaurants, and car insurance. These should come after giving and saving, but before all other categories in my budget.

The four walls are: cell phone bill, car insurance, shelter, and money for the movies. These should come after giving and saving, but before all other categories in my budget.

The four walls are: food, utilities, transportation, and college fund. These should come after giving and saving, but before all other categories in my budget.

SHORT ANSWER QUESTION: Explain the difference between a fixed expense and a variable expense, and include an example of each.

A fixed expense is an expense that is the same amount every month, like rent. A variable expense is one that fluctuates every month, like gas for my car.

A fixed expense is an expense that is the same amount every month, like groceries. A variable expense is one that fluctuates every month, like my cell phone bill.

A fixed expense is an expense that is the same every month, like utilities. A variable expense is one that fluctuates every month, like groceries.

A fixed expense is an expense that is the same every month, like rent. A variable expense is one that fluctuates every month, like my car payment.

SHORT ANSWER QUESTION: What are some key components of successful budgeting?

Creating the budget, tracking my spending, finding a system that works for me, adjusting my budget depending on how the month went, and sticking to the budget.

Creating the budget, finding a system that works for me, adjusting my budget depending on how the month went, and sticking to the budget.

Creating the budget, tracking my spending, finding a system that works for me, and sticking to the budget.

Creating the budget, tracking my spending, finding a system that works for everyone, adjusting my budget depending on how the month went, and sticking to the budget.

SHORT ANSWER QUESTION: Describe irregular income and give examples.

Irregular income fluctuates from month to month. It isn't a fixed amount every two weeks or month. Examples of irregular income are commission-based jobs, seasonal retail jobs, grass cutting businesses, or baking side hustle.

Irregular income fluctuates from month to month. It isn't a variable amount every two weeks or month. Examples of irregular income are commission-based jobs, seasonal retail jobs, grass cutting businesses, or baking side hustle.

Irregular income stays the same from month to month. It is a fixed amount every two weeks or month. Examples of irregular income are commission-based jobs, seasonal retail jobs, grass cutting businesses, or baking side hustle.

Irregular income fluctuates from month to month. It isn't a fixed amount every two weeks or month. Examples of irregular income are teaching students, coaching players, retail jobs, or baking side hustle

SHORT ANSWER QUESTION: What makes a budget a zero-based budget?

When my income minus my expenses (giving, saving, and spending) equals zero.

When my income minus my assets (giving, saving, and spending) equals zero.

When my income minus my expenses (saving and spending) equals zero.

When I spend all of my money by the end of each month.

ESSAY QUESTION: What's an example of an unexpected expense that may occur? How would you adjust your budget to ensure that you don't overspend that month?

Honestly, I have no idea what you're talking about!

I can do this, I think... I might need you to go over it just in case.

Umm... I might be able to answer part of this, DEF NOT ALL OF THIS!

ESSAY QUESTION: Explain cash-flow statements. How do they work and what specifically do they show you? Give examples of how a cash flow statement will help you adjust your budget for the following month.

Umm... can you go over this?! I'm so confused!

I might be able to figure it out, but can you over it that way I know for sure.

WHAT ARE YOU SAYING!?!?! THIS IS FOREIGN TO ME!!

WHAT EVEN IS A CASH-FLOW STATEMENT?! DID THEY EVEN TALK ABOUT THAT!?!

Personal Finance Chapter 2 Test - Ramsey Classroom

9th - 12th Grade

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37 Qs

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Personal Finance Chapter 2 Test - Ramsey Classroom

Quiz

•

Business

•

9th - 12th Grade

•

Practice Problem

•

Medium

Alexandria St Clair

Used 70+ times

FREE Resource

37 questions

Show all answers

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Although the majority of Americans think budgeting is important, about ____ of Americans actually use a budget.

75%

50%

23%

35%

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is NOT a component of a budget?

Credit score

Saving

Income

Giving

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Online budgeting apps are more effective than budgeting with pen and paper.

True

False

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What are the Four Walls?

Utilities, college fund, restaurants, and car insurance

Cell phone bill, car insurance, shelter, and money for the movies

Food, utilities, transportation, and college fund

Food, utilities, shelter, and transportation

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How many categories should you have in your budget?

15 or more

No limit; use as many as you need to keep your budget accurate!

No more than 10

At least 3

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How often should you create a budget?

Daily

Weekly

Monthly

Biannually

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

If you get married, only one person is responsible for budgeting.

True

False

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Personal Finance Chapter 2 Test - Ramsey Classroom

37 questions

Although the majority of Americans think budgeting is important, about ____ of Americans actually use a budget.

Which of the following is NOT a component of a budget?

Online budgeting apps are more effective than budgeting with pen and paper.

What are the Four Walls?

How many categories should you have in your budget?

How often should you create a budget?

If you get married, only one person is responsible for budgeting.

What does a budget show you?

Detailed categories on your budget will help you make better spending decisions.

A budget says what will happen with your money, while a cash-flow statement shows what already happened.

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