Budgeting Practice Quiz

You earn a salary of $40,000 per year and decide to save 20% of your gross pay. You set a goal of creating  a $16,000 emergency fund. How long will it take for you to achieve your goal?

• 6 months

• 1 year

• 2 years

• 3 years

Greg is trying to decide whether he needs a car when he moves to the city. Which of the following would be a reason for Greg to get a car rather than use public transportation?  

• There are several public transportation routes between Greg's apartment and work 

• The cost of public transportation is less than Greg’s monthly car payment 

• Greg’s company covers half the cost of his monthly public transportation pass 

• Using public transportation, Greg’s commute to work one-way is two hours 

Isaiah has a summer internship at a technology company and is paid $3,000. After Federal and Provincial taxes, CPP, and EI are deducted, his take-home pay is $2,500. Which of the statements below is correct? 

• His gross pay is $2,500 and net pay is $3,000 

• His gross and net pay are $3,000 

• His gross and net pay are $2,500 

• His gross pay is $3,000 and net pay is $2,500 

Which description is most accurate for a Zero-Based Budget?  

• You put every dollar of your net pay into a budget category each month 

• You spend your checking account balance down to $0 every month 

• You spend your saving account balance down to $0 every month 

• You pay every one of your debts down to $0 every month 

You're considering moving into a 3 bedroom apartment with 2 roommates, rather than living on your own. Which of your expenses would likely decrease by having roommates? 

• Groceries and eating out  

• Rent

• Cell phone bill

• Bedroom furniture 

You overhear your cousin talking about the importance of creating and sticking to a budget. All of the following are good reasons to create and stick to a budget EXCEPT:  

• Having a budget is a requirement for obtaining a mortgage 

• Having a budget can help you create an emergency fund 

• Using a budget can allow you to work towards your financial goals 

• A budget can help you identify any bad spending habits 

Which one of these expenses most likely represents a VARIABLE cost in someone's budget?  

• Student loan payment 

• Rent 

• Electricity bill 

• Car insurance premium 

What action corresponds to the advice "Pay yourself first?"  

• Wait until the end of the month to determine how much you have leftover to save 

• Set aside a fraction of your paycheck into a savings account before you start spending 

• Spend your regular paycheck on needs and wants but funnel any extra money into saving 

• Become self-employed so you're paying yourself instead of being paid by an employer 

Now that Jeana is done with university, she is trying to decide whether or not she should buy a new laptop for herself. She has made a list of questions she can ask herself to determine if the new laptop is a need or a want. Which of the following questions would you ELIMINATE from this list?  

• Can I afford this laptop right now? 

• Is this the right time to buy this laptop or will it likely be on sale later? 

• How am I going to pay for this laptop? If I have to charge it or take out a loan, can I afford the monthly payments? 

• What model laptop is trendy right now with people my age?  

Cody is considering what auto costs she is going to have after buying a new car. She has budgeted enough money for the monthly auto loan payment, gas, and auto insurance. Has Cody factored in all of the costs associated with car ownership?  

• Yes, these are the three costs she should expect to pay once she is a car owner 

• No, she does not need to include the cost of auto insurance as it is included in her auto loan payment. 

• No, she needs to factor in other costs such as maintenance, emergency repairs, etc.  

• No, she does not need to include the cost of gas as it is covered under her auto insurance policy