Budgeting Unit 1, 2 3, 4

1. Why is it important to create a budget as a teenager?

• 1. A budget is required to qualify for financial aid for college

• 1. A budget makes filing your taxes faster and simpler

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

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

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

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

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

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

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

3. How can the college you choose to attend impact your future adult budget?

• 1. Any student loans you owe will become a necessary expense in your budget

• 1. Students who attend more expensive colleges earn more income once they start working

• 1. The budget you create during freshman year will be the same budget you use until age 30

• 1. Your scholarship money will impact your taxes for years to come

1. Net wealth is best defined as...

• 1. The value of your home, car, and investments

• 1. The total of all of your assets minus the total of all of your debts

• 1. Reaching the top 10% of all households in the US

• 1. Your monthly income minus your monthly expenses

2. If you are following a 50/30/20 Budget, what two items fall into the 20 category?

• 1. Wants & needs

• 1. Saving & debt repayment

• 1. Income & expenses

• 1. Fixed & variable costs

  
  

3. What does it mean to "pay yourself first?"

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

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

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

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

  
  

1. All of the following options are considered a “need” EXCEPT…

• 1. Music streaming subscription

• 1. Gas for your car

• 1. Monthly health insurance premium

• 1. Rent

2. All of the following options are considered “wants” EXCEPT…

• 1. Electricity and gas

• 1. New fall sweater

• 1. Eating at your favorite local restaurant

• 1. Netflix subscription

  
  

3. Which of the following statements about savings is TRUE?

• 1. Saving is best for long-term goals only

• 1. Setting aside money each month consistently will help you in the long run when future needs come up

• 1. You should dedicate 20% of your income to computer upgrades each month

• 1. Monthly expenses like utilities should be categorized under saving

  
  

4. Why is it helpful to track your spending for 2 months?

• 1. You can receive higher interest rates for your savings account when you can show how you spend your money

• 1. You can receive special discounts at certain stores when you can show how you spend your money

• 1. To identify your spending patterns and then prioritize your needs, wants, and savings goals

• 1. To eliminate all spending on your wants