Everfi Grow Mod 2

Every month, Noah takes home around $2,000. He uses $1,000 to cover his share of rent, utilities, transportation, and groceries. He uses around $650 on entertainment, eating out with friends, and other incidentals. The other $350, he divides between saving for emergencies and paying his student loans. What money management strategy is Noah using?

• Pay yourself first

• The 50-30-20 Method

• The Categories Method

• Investing in stocks

● Sara is a server at a restaurant and most of her pay is in cash. She's used to dealing with cash and has a system where she divides her money into different envelopes each month. She has one envelope for rent, one for groceries, one for gas, etc. At the end of each month, she takes one envelope for savings and deposits it into her savings account. What money management strategy is Sara using?

• Pay yourself first

• The 50-30-20 Method

• The Categories Method

• Investing in stocks

What should all budgeting methods have in common?

• Dividing net income by percentages

• Defining different classifications of expenses

• Putting money in savings for the future

• Using credit cards wisely to build credit history

Which of the following describes an expense that should be covered by an emergency savings?

• Buying clothes for the holidays

• Paying your monthly cell phone bill

• Going on summer vacation with friends

• Repairing your car after a fender bender

● Which of the following should not be paid for with an emergency savings fund?

• Replacing a broken down transmission in your car

• Getting a regular oil change to keep your car running

• Repairing your car after a fender bender

• A downpayment for a new car after your previous car was totaled

In the 50-30-20 budgeting method, saving for emergency expenses would fall under which category?

• 50

• 30

• 20

• None: it's part of pay yourself first

● Why is putting even a small amount into savings from every paycheck a smart money habit?

• Because it allows you to pay all of your bills

• Because even small amounts add up with interest

• So you will be prepared for every emergency expense

• Because it is a quick way to improve your credit score

Which of the following is an example of unnecessary debt?

• Using a car loan to buy a used car

• Using a mortgage to purchase a home

• Paying for entertainment with a credit card

• Paying for education with student loans

● If you find that your budget is falling short each months, what smart actions could you take?

• Use emergency savings

• Put everything on a credit card and only pay the minimum amount due

• Pay less on your cell phone bill

• Pick up extra shifts at work

Lara received $900 in one paycheck. If she follows the 50-30-20 method, how much money will she put toward her wants?

• $900

• $450

• $270

• $180