Finance and Budgeting Quiz

What is income?

• Money you owe.

• Money you receive from work or other sources.

• Money spent on wants.

• Money borrowed from a bank.

Why is income considered limited?

• Because people can earn unlimited money.

• Because people have to pay taxes.

• Because there are endless wants but limited income.

• Because money is only used for savings.

Which of the following is NOT a source of income?

• A weekly allowance.

• Interest from a savings account.

• Buying a new video game.

• Wages from a part-time job.

If you earn $50 a week and spend $60, what is the result?

• You have saved $10.

• You have a balanced budget.

• You have overspent by $10.

• You have extra income.

Which of these is an example of earned income?

• Birthday gift money.

• Interest from a bank account.

• Wages from a summer job.

• Money found on the street.

What is the main purpose of a budget?

• To spend all your money quickly.

• To plan how to spend and save your income.

• To avoid paying taxes.

• To borrow more money.

In the 50/30/20 budgeting rule, what does the 20% represent?

• Money for entertainment.

• Money for savings and debt repayment.

• Money for rent.

• Money for groceries.

Which of the following is a fixed expense?

• Monthly rent payment.

• Eating out at restaurants.

• Buying new clothes.

• Going to the movies.

What does zero-based budgeting mean?

• Spending zero dollars each month.

• Saving all your income.

• Assigning every dollar of income to expenses or savings so that nothing is left unallocated.

• Having no income.

Which method involves using cash in envelopes for different spending categories?

• Zero-based budgeting.

• Envelope method.

• 50/30/20 rule.

• Pay-yourself-first method.