Budgeting Basics Quiz

What is a budget?

• A rigid spending plan that restricts spending

• A plan for allocating income based on income and expenses

• A map showing the way to reach short-term and long-term financial goals

• A formal statement of estimated income and expenses based on future plans and goals

What is the purpose of a budget?

• To allocate income to reach personal financial goals

• To track income and expenses

• To restrict spending and save money

• To accumulate debt and reach financial goals

What is a spending plan?

• A plan for allocating income based on income and expenses

• A plan for accumulating debt and reaching financial goals

• A less rigid version of a budget

• A map showing the way to reach short-term and long-term financial goals

What is the 50, 30, 20 rule?

• 50% of income for needs, 30% for wants, and 20% for savings and debt repayment

• 50% of income for wants, 30% for needs, and 20% for savings and debt repayment

• 50% of income for savings and debt repayment, 30% for needs, and 20% for wants

• 50% of income for savings and debt repayment, 30% for wants, and 20% for needs

Why is it important to recognize the expenses that fall into different categories?

• To restrict spending and save money

• To track income and expenses

• To allocate income to reach personal financial goals

• To create a budget based on personal situation

What do budgets help people see?

• How they spend their money and reach financial goals

• How to restrict spending and save money

• How to accumulate debt and reach financial goals

• How to spend money wisely and avoid debt

What are the two components of a budget?

• Expenses and savings

• Income and expenses

• Expenses and debt

• Income and savings

Why do people track their income and expenses?

• To understand where their money is going and make adjustments

• To accumulate debt and reach financial goals

• To allocate income to reach personal financial goals

• To restrict spending and save money

What is the purpose of Marie's budget?

• To allocate income to reach personal financial goals

• To accumulate debt and reach financial goals

• To track income and expenses

• To restrict spending and save money

What is the amount of Marie's monthly income from her job as a babysitter?

• $0

• $25 per month

• $200 per year

• $25 per week