Spending Plan Test

What is a spending plan?

• A. A tool used to record and track projected and actual income and expenses over time.

• B. A method to increase income.

• C. A way to avoid all expenses.

• D. A strategy to invest in stocks.

What is unearned money?

• A. Money received for no exchange.

• B. Money earned from a job.

• C. Money saved in a bank.

• D. Money invested in stocks.

What are fixed expenses?

• A. Expenses that vary every month.

• B. Expenses that occur every period and are typically about the same amount.

• C. Expenses that are optional.

• D. Expenses that are unpredictable.

What is one reason consumers might feel a budget is restrictive?

• A. It allows for more freedom.

• B. It provides more options.

• C. It limits how money can be spent.

• D. It encourages wiser choices.

Which of the following is a way to reduce negative cash flow?

• Buying items at full price

• Doing comparison shopping

• Making impulse decisions

• Ignoring sales

What is the recommended percentage for Food and Household expenses?

• 10%

• 20%

• 30%

• 40%

What should be done with each envelope in the Envelope System?

• It should be ignored

• It should be labeled for the category of spending

• It should be used for savings only

• It should be left empty

What should be done once an envelope is empty in the Envelope System?

• Continue spending

• Refill it immediately

• Stop spending in that category

• Ignore it

What is the recommended percentage for Clothing and Personal expenses?

• 30%

• 20%

• 10%

• 40%

What is the recommended percentage for Saving and Investing?

• 10%

• 20%

• 30%

• 40%