Budgeting - Study Guide

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

• Loan payment on a new car
• Postponing a purchase for a big-screen TV

2. You earn a salary of $40,000 per year and decide to save 20% of your gross pay. You set a goal of creating a $16,000 emergency fund. How long will it take for you to achieve your goal?

• 6 months
• 2 years

3. If you are trying to substantially reduce the amount you spend on food, you should try...

• Cooking your own food at home for as many meals as possible
• Dining at restaurants more often so you don't waste water doing dishes

4. Leila just graduated from college and is comparing a few different cities to move to. Which of these factors is the LEAST important thing for her to consider right now?

• Average rent for an apartment
• Average cost of Uber, Lyft, or taxi fare

5. Greg is trying to decide whether he needs a car when he moves to the city. Which of the following would be a reason for Greg to get a car rather than use public transportation?

• There are several public transportation routes between Greg's apartment and work
• Using public transportation, Greg’s commute to work one-way is two hours

6. Which of these boxes of cereal has the LOWEST unit price?

• Cereal B, which costs $5.00 for a 32 oz. box
• Cereal C, which costs $2.50 for a 10 oz. box

7. Isaiah has a summer internship at a technology company and is paid $3,000. After Federal and state taxes, Social Security, and Medicare are deducted, his take-home pay is $2,500. Which of the statements below is correct?

• His gross and net pay are $3,000
• His gross pay is $3,000 and net pay is $2,500

8. You are putting together your first post-graduation budget. Your net pay is $2,500 per month and you estimate that your monthly expenses will be $2,625. Which of the following is TRUE?

• You have an extra $125 each month that you can spend on a fun or leisure activity
• You need to either cut back on your spending or find an additional source of income to balance your budget

9. You are interested in renting an apartment after graduating college. You meet with the landlord and complete the application. All of the following may need to be provided when you sign your lease EXCEPT

• Proof of employment
• A bank account

10. All of the following are good budgeting strategies if you want to save money at the grocery store EXCEPT:

• Focusing on unit price when comparing similar products
• Focusing only on the price when comparing similar products