Budgeting Test Review

When creating a budget, which list below portrays expense categories in the most responsible order?

• All of your needs, high priority wants, low priority wants, savings

• All of your needs, savings, high priority wants, low priority wants

• All of your needs, high priority wants, savings, low priority wants

• Savings, high priority wants, low priority wants, all of your needs

Why is it important to create a budget?

• A budget is a necessary to qualify for loans and credit cards

• A budget makes filing your taxes faster and simpler

• A budget will help you save money and prioritize your spending

• A budget will guarantee you have enough money saved for college so you won't need loans

Which of the following situations is an example of net pay?

• Brian multiplies his hourly wage by his total hours worked

• Chrissy multiplies their hourly wage by their total hours worked and subtracts taxes

• Timothy multiplies his hourly wage by his total hours worked then subtracts taxes and deductions

• Helene multiplies her hourly wage by her total hours worked then subtracts taxes, deductions, and budgeted needs

What does it mean to "pay yourself first?"

• Set aside some fun money in each month's budget so you can enjoy yourself

• Auto-deposit a set amount of money into savings after each paycheck so that you don't spend all your income

• Be self-employed, so that you don't have a boss and get to keep all income from your business for yourself

• Do all of your budgeting at the beginning of the month, rather than at the end

Which of the following is a recurring expense?

• A large car repair bill

• A concert ticket

• Daily Starbucks latte

• Rent

Djamila is using the envelope budgeting method. She wants to go out with friends to eat and opens her Restaurant envelope to find that it only has $5 left in it. What budgeting advice would you give to her?

• Borrow money from another category that will likely have a surplus this month

• Use her credit card and put extra money into the credit card envelope next month

• Dip into her emergency fund to cover the shortfall

• Suggest other options to her friends that don't involve going out to eat

What is the purpose of an apartment lease?

• It provides the budget you'll use for all of your household expenses

• It outlines the amount of rent you'll pay, when it is due, and key obligations and rights of living in the property

• It provides insurance if any guests to your apartment are injured on the property

• It makes it illegal for your landlord to evict you from the property

All of the following are types of utilities that you may have to budget for EXCEPT

• Electric

• Water/Sewer

• Gas

• Rent

Young adults are more often choosing to rent instead of buying a home because...

• Monthly rent payments are always lower than monthly mortgage payments

• Landlords give young people better rates on apartments than older people can qualify for

• They're graduating with a lot of student debt they must pay off, so it takes longer to save a down payment

• Renting is a better long-term investment strategy

Which scenario below is an example of a person whose car payment is probably too high?

• Chester pays $390 per month for his car and saves $500 per month

• Amal pays $430 per month for her car and saves $500 per month

• Logan pays $250 per month for his car and saves $250 per month

• Isra pays $400 per month for her car and saves $350 per month