Financial Literacy Quiz

What is a budget and why is having one a good idea?

Why did Tony suggest that Rachel avoid cutting her budget too severely?

Do you plan to prepare a budget? If not, why not?

A budget is:

• spendable income

• a plan for spending and saving money

• your assets

• take home pay

Housing should be what percentage of your budget:

• 80%

• 100%

• 15%

• 33%

An emergency fund should have how much in savings:

• two weeks of spendable income

• a year of FICA

• two months of your 401K contributions

• 3-6 months of fixed income to cover your expenses

A student loan is:

• an IRA

• good debt

• a spending plan

• bad debt

When purchasing a car it is best to:

• put 20% down

• buy a used car

• to buy one with low mileage

• all of the above

To get out of credit card debt:

• pay off the low interest rate credit cards first

• put all your fixed expenses on the credit card with the most available

• pay off the highest interest rate card first

• none of the above

A budget is only needed when:

• you don't live with your parents

• you have a job

• you get into credit card debt

• always