PCC Personal Finance Review

What is a budget?

• 
  A. A detailed plan for future investments

• B. An estimate of incoming revenue and outgoing expenses over a period of time

• 
  C. A list of all assets and liabilities

• 
  D. A summary of past financial transactions

Which of the following is a benefit of understanding where our money is coming from and what it is going to?

• A. Ignoring financial goals

• B. Setting expectations

• C. Increasing expenses

• D. Reducing income

What are the two main components you need to understand in order to build a budget?

• Savings and investments

• Revenue and expense

• Income and debt

• Assets and liabilities

What does the Housing Costs category include?

• Grocery shopping and eating out

• Rent/mortgage, property taxes, home/renters insurance, maintenance costs, HOA fees, and PMI

• Cell phone, cable, internet, gas, electricity, trash/sewer

• Medical and healthcare bills, co-pays, prescriptions, eye and dental care

What should you do after paying off all of your debt, except your mortgage?

• 
  Save $1,000 for an emergency fund

• Save three to six months of expenses as your new emergency fund

• Begin saving 10 - 15% of your income for retirement

• 
  Save for your children's college fund

What does "opportunity costs" refer to?

• The cost of borrowing money

• Funds available for spending in the economy

• What a person gives up in order to execute another decision

• General trends in the value of U.S. stocks

Which of the following is a personal factor in budgeting?

• 
  Interest rates

• 
  Stock market index

• Money supply

• Values

Which tax is a pay deduction required by law that supports the federal government?

• 
  State income tax

• Social Security tax

• Federal income tax

• Payroll deductions

What is the total amount of money you have earned during a pay period, before any deductions?

• Net pay

• Gross pay

• Benefits

• Earnings statement

What is the amount of income that you actually ‘take home’ after pay deductions?

• 
  Gross pay

• Net pay

• Earnings statement

• 
  State income tax