Intro to Budgeting - 8th grade

1. Which of these costs would be the LEAST difficult to adjust if you were looking to reduce your expenses?

• Dining out at local restaurants
• Car loan payments

• Rent

• Basic cell phone service

2. You earn a salary of $120,000 per year and decide to save 20% of your gross pay. You set a goal of creating a $20,000 emergency fund. How long will it take for you to achieve your goal?

• 6 months
• 10 months

• 1 year

• 2 years

3. If you are trying to save money on food, do the following...

• Cook your own meals as much as possible

• Eat at McDonalds for breakfast and Chik-Fil-A for lunch

• Buy more snacks from 7-11 to keep you full.

• Drink more coffee and soda so you don't have to eat as much

7. Asher has a summer internship at a telecommunications company and is paid $5,000. After Federal and state taxes, Social Security, and Medicare are deducted, his take-home pay is $4,400. Which of the statements below is correct?

• His gross pay is $4,400 and net pay is $5,000

• His gross and net pay are $5,000

• His gross and net pay are $4,400

• His gross pay is $5,000 and net pay is $4,400

8. You just started your first job after college and are creating your budget. Your net pay is $4,500 per month and you estimate that your monthly expenses will be $4,625. Which of the following is TRUE?

• You have an extra $125 each month that you can put in your savings account

• You can make small loans to friends without worrying about being paid back

• Your budget will not be balanced unless you cut some expenses or find a part-time job

• Following a budget will be too stressful. Just buy what you want and everything will work out.

11. Which description is most accurate for a Zero-Based Budget?

• You put every dollar of your net pay into a budget category each month
• You transfer your checking account balance to your savings account and add money as you pay bills

• You transfer your saving account balance to your checking account so there is never more $0 every month in savings

• Every debt is paid in full each month

12. Andrew has gone over his budget by around $200 for the last two months. Which of these options makes the most sense for him to fix his problem?

• Cancel all but one subscription and eat at home

• Pay just the minimum monthly payment on loans and credit card debt, instead of the extra he's been contributing

• Contribute $100 less to savings each month and $100 less to his retirement fund

• Sell his Pokemon cards

13. You're considering moving into a 4 bedroom apartment with 3 roommates, rather than living on your own after college. Which of your expenses would likely decrease by having roommates?

• Commuting expense

• Rent
• Game subscriptions

• Gym membership

16. Your friend has been talking about the importance of creating and sticking to a budget. All of the following are good reasons to create and stick to a budget EXCEPT:

• Bad spending habits will stand out when you prepare a budget

• Your financial goals will be easier to manage if you use a budget

• Budgeting can help you create an emergency fund

• You need a budget to apply for college

17. These are all fixed expenses except for...

• Electric bill

• Rent
• Car loan payment

• Student loan payment