Expenses, Budgeting, and Banking Review

Theresa pays for her phone plan, which is $30 every month. Which best describes this expense?

• Fixed expense

• Variable expense

Jackson goes out to eat which his friends, then goes to the local theater to watch a movie. He does not have to pay for those things but chooses to do so. Which best describes these expenses?

• Discretionary expenses

• Non-discretionary expenses

What is NOT a category that should appear on every budget?

• Income

• Expenses

• Taxes

• Savings

• Investments

What is the first step when making a budget?

• List your income.

• List your expenses.

• Track your expenses.

• Subtract expenses from your income.

According to the 50-30-20 rule, how much of your income should be budgeted for needs?

• 50%

• 30%

• 20%

Wanda budgets $3,500 for her estimated income and $3,000 for all her planned expenses and savings goals, leaving her with $500 left over. Is this a zero-based budget?

• Yes

• No

Part of your budget should be devoted to savings. One of the first things you should save for is an emergency fund. How much money should an adult save in his or her emergency fund?

• $1,000

• 50% of gross income

• enough to pay for 3-6 months of essential expenses

• at least $50,000

Which type of financial institution is for-profit, allows anyone to be a customer, and often provides a more diverse array of products but may charge higher fees and interest rates?

• Bank

• Credit Union

• Brokerage

Which type of financial institution is non-profit, sets requirements for membership, usually offers lower fees and better interest rates but fewer product offerings, and may provide more personalized service?

• Bank

• Credit Union

• Brokerage

What is the primary purpose of the FDIC and NCUA?

• provide financial planning and tax advice

• invest money into the stock market for their customers

• insure deposits in case a bank or credit union fails