2.6 Budgeting Reading Follow Up Questions

What is the recommended percentage of income to allocate to housing costs?

• 70%

• 50%

• 30%

• 10%

Which budgeting method suggests spending 50% on needs, 30% on wants, and 20% on savings?

• The Envelope System

• Zero-based Budgeting

• 80/20 Method

• 50/30/20 Method

What is the average percentage of income spent on transportation according to the U.S. Bureau of Labor Statistics?

• 5.6%

• 11.6%

• 15.6%

• 20.6%

Which category should include rent or mortgage payments?

• Transportation

• Food

• Housing

• Healthcare

What is a common rule of thumb for the percentage of income to allocate to savings and investments?

• 10%

• 20%

• 30%

• 40%

Which budgeting method assigns a purpose to every last dollar of your income?

• Zero-based Budgeting

• 80/20 Method

• The Envelope System

• 50/30/20 Method

What is the main benefit of using a budgeting calculator?

• It reduces your expenses

• It increases your income

• It shows you where your money is going

• It helps you avoid taxes

Which category should include costs such as public transit, car payments, and auto insurance?

• Healthcare

• Housing

• Transportation

• Food

What is the purpose of the 'Envelope System' in budgeting?

• To invest in stocks

• To reduce taxes

• To allocate a specific amount of money to each budget category

• To save 50% of your income

Which category should include medical, dental, and vision care insurance premiums?

• Food

• Transportation

• Housing

• Healthcare