Fin. Lit Unit 2 Review

If you used the 50-30-20 rule of budgeting, how much money would you be spending on expenses?

• 10%
• 30%
• 20%
• 50%

If you are trying to substantially reduce the amount you spend on food, you should try...

• Ordering takeout every night.
• Eating out at expensive restaurants.
• Meal planning and cooking at home instead of eating out.
• Buying pre-packaged meals from the grocery store.

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 $800, car payment of $350, car insurance of $150, car maintenance of $50, entertainment of $500, food expense of $250, mobile phone of $75, student loan payment of $225 and other expenses of $300. How would you describe your budget after analyzing all of your income and expenses

• in a surplus

• In a deficit

• Balanced

• Perfect

You're considering moving into a 4-bedroom apartment with 3 roommates rather than living on your own post-college. Which of your expenses would likely STAY THE SAME even by having roommates?

• Internet bill
• Utilities
• Car Payment

• Rent

How is gross pay different than net pay?

• Gross pay is the total amount of money earned before any deductions, while net pay is the amount of money received after deductions.
• Gross pay is the total amount of money earned after deductions, while net pay is the amount of money received before deductions.
• Gross pay is the amount of money received after taxes, while net pay is the total amount of money earned before taxes.
• Gross pay is the amount of money received after deductions, while net pay is the total amount of money earned before any deductions.

Which one of these expenses most likely represents a VARIABLE cost in someone's budget?

• Rent
• Mortgage
• Car payment
• Groceries

Max is a real estate agent. Why is it particularly important that Max, and other real estate agents like him, have an emergency fund?

• To have extra money for vacations.
• To pay for professional development courses.
• To cover expenses during periods of low or no income.
• To invest in real estate properties.

When reconciling a bank statement, the amount of outstanding checks is

• The total amount of checks that have been issued but not yet presented for payment.
• The total amount of checks that have been presented for payment.
• The total amount of checks that have been cleared by the bank.
• The total amount of checks that have been voided or cancelled.

Month after month, Brian is spending more than he budgets and is decreasing his savings account balance as a result. Which action would you recommend he take immediately?

• Cut back on unnecessary expenses
• Find ways to increase income
• Seek financial advice
• Create a budget and stick to it.

What does the phrase "Pay yourself first" mean?

• To spend all of your income on yourself before paying any bills or expenses.
• To give yourself a raise before paying your employees.
• To prioritize saving or investing a portion of your income before spending it on other expenses.
• To prioritize paying off debt before saving or investing.