Chapter 4 test: Budgeting Review

What does it mean to pay yourself first?

• making a conscious effort to spend less each day

• setting aside a fixed amount for savings before paying bills

• saving on federal taxes by claiming more exemptions

• decreasing savings to establish a sound financial future

Which of the following is a variable expense?

• Apartment Rent
• Grocery Bill
• Car Payment
• Renter's Insurance

Which of the following is a fixed expense?

• Apartment Rent
• Grocery Bills
• Laundry
• Gas Purchases

When calculating net worth, how do I determine net liabilities?

• Add everything you owe

• Average your 12 monthly budgets for the year

• Add up everything you own of value

• Your most current bank balance

How is net worth calculated?

• Assets minus everything you own.

• Assets plus liabilities

• Assets minus liabilities

• Assets divided by 12 (months)

A budget variance is the difference between net income and net expenses. What is the ideal variance?

• income is more than expenses

• income is less than expenses

6. I want to save money to travel to Tahiti in TWO YEARS. What type of goal is this?

• Short Term Goals
• Long Term Goals
• Medium (intermediate) Term Goals
• Durable Goals

Joe wants to pay off his car within 4 YEARS. What type of goal has he set?

• Short Term Goal
• Long Term Goal
• Medium (intermediate) Term Goal
• Durable Goal

Bub and Belinda are 22 and would like to pay off their student loans BEFORE they turn 33. What goal classification does this meet?

• Short Term Goals
• Long Term Goals
• Medium Term Goal

Which of the items would MOST LIKELY to be considered a need?

• Trip to England

• Laptop

• House

• Television