FinLit Unit 2 Quiz

A budget is:

• a plan for saving and spending money

• a type of investment

• a financial institution

• a loan agreement

Budgets are important because they help in:

• Tracking expenses and income

• Increasing expenses

• Ignoring financial goals

• Spending without limits

What are the three variables to consider when creating a budget?

• Income, Savings, Time

• Income, Expenses, Time

• Income, Investments, Time

• Income, Debts, Time

Define 'Income' as it relates to budgeting.

• Income is how much money you earn.

• Income is the amount of money you spend.

• Income is the total of your debts.

• Income is the value of your assets.

What can happen to your money if you spend it without putting any thought into how much you're spending, where you're spending, or how often you're spending?

• You may save more money.

• You may run out of money quickly.

• You may earn more interest.

• You may increase your wealth.

All the things that a person spends money on are called __________________________.

• expenses

• savings

• investments

• earnings

List the three types of expenses: A. __________________________ B. __________________________ C. __________________________

• Fixed, Variable, Periodic

• Essential, Non-essential, Luxury

• Capital, Revenue, Deferred

• Direct, Indirect, Overhead

This type of expense is one you can expect to pay each month. The cost of these items may vary slightly but are generally predictable.

• fixed expenses

• variable expenses

• discretionary expenses

• unexpected expenses

Give an example of a periodic expense.

• Cost of books for a semester.

• Buying a new laptop.

• Paying for a one-time event ticket.

• Purchasing a new phone.

This type of expense is one that we pay annually (once a year), quarterly (once every 3 months), or occurs at unexpected times.

• periodic expenses

• fixed expenses

• variable expenses

• discretionary expenses