Chapter 8: Budget Busters

The sooner you begin saving, the more time your money has to grow.

• True

• False

Disposable income is the amount of money left after paying all current necessities, such as rent, food, and clothing.

• True

• False

Net worth is the value of all of your liabilities minus your assets.

• True

• False

Short-term savings is money you put away for major expenses in the future.

• True

• False

The amount earned on the principal savings or investment is called interest.

• True

• False

The concept of paying into your savings first, and then living on the remainder of your take-home pay is called

• Net pay

• Pay Yourself First

• Long-term savings

• Disposable income

Which of the following is considered to be an asset?

• Bank account

• Apartment

• Student loan

• Cell phone contract

A detailed estimate of income and expenses for a specific period of time is known as a

• Budget

• Budget variance

• Liability

• Financial record

What is NOT considered to be a financial record?

• Pay stub

• Loan contract

• Term paper

• Insurance policy

What strategy should a person focus on when preparing a budget?

• Understand their income

• Assess what they own and what they owe

• Review their goals

• All of the above