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WorksheetsChapter 6 Review
Total questions: 42
Worksheet time: 3hrs 26mins
The most common time frame individuals use when developing a budget is __________.
Daily
Weekly
Monthly
Yearly
If you have a budget deficit and are trying to distinguish between needs and wants in your budget, which question is MOST helpful?
Will there be a bad consequence if I don't buy this item?
Do all of my friends have this item?
Will this item last more than one year?
Does this item make me happy?
In which scenario below would an unlimited data plan on your smartphone be best classified as a NEED?
If it allows you to check email and get updates on Twitter during class
If you don't have wifi at home and it allows you to complete homework assignments
If it gives you the ability to use a mobile wallet instead of a debit or credit card
If it keeps you entertained by allowing you to stream videos anywhere
How can the college you choose to attend impact your future adult budget?
Any student loans you owe will become a necessary expense in your budget
Students who attend more expensive colleges earn more income once they start working
The budget you create during freshman year will be the same budget you use until age 30
Your scholarship money will impact your taxes for years to come
How are savings and budgeting related?
Once you save enough money, you will no longer need to budget
A good budget will help control your spending and enable higher saving
The more money you save, the higher amount of income you will have available to spend
Saving is the final amount of money you have leftover in any monthly budget
How can completing a budget be beneficial to your health?
A budget reduces your insurance premiums, making it easier to get access to health care
A budget reduces the mental and emotional stress of never knowing if you'll have enough to cover expenses
A budget increases your income, letting you spend more on healthy foods, gym memberships, etc.
A budget increases your heart rate, cholesterol, and other health metrics
Which of these typically represents a fixed cost in a monthly budget?
Rent or mortgage
Car maintainence
Dining Out
Groceries
Net wealth is best defined as...
The value of your home, car, and investments
The total of all of your assets minus the total of all of your debts
Reaching the top 10% of all households in the US
Your monthly income minus your monthly expenses
If you are following a 50/30/20 Budget, what two items fall into the 20 category?
Wants & needs
Saving & debt repayment
Income & expenses
Fixed & variable costs
Why is Zero-Based Budgeting called Zero-Based Budgeting?
Your checking account balance goes to $0 every month
It's the best budget to use if you currently have $0 in your savings account
Your budget's income and expenses total to exactly $0, so every dollar is accounted for
It requires 0 knowledge of budgeting skills to achieve this type of budget
Malachi is a 25-year-old man who lives with a roommate in Kansas City. He is going to start using the Cash Envelope method of budgeting. Why is it unnecessary for him to create an envelope called "Car Payment"?
His car payment should be fixed every month, so he doesn't need to monitor spending in this category
His car payment is far too large to take out that amount of cash from the ATM
He should not be spending any money on a car, so he should stop making those payments immediately
A car payment is an expense he would likely split with his roommate, so it isn't suitable for Cash Envelope Budgeting
What does it mean to "pay yourself first?"
Set aside some fun money in each month's budget so you can enjoy yourself
Auto-deposit a set amount of money into savings after each paycheck so that you don't spend all your income
Be self-employed, so that you don't have a boss and get to keep all income from your business for yourself
Do all of your budgeting at the beginning of the month, rather than at the end
Erik is using Zero-Based Budgeting, and every month he has net pay of $500 from his part-time job. As he does his budgeting for next month, he estimates he will need $450 of that to meet his expenses. What should he do with the remaining $50?
Deposit it into his checking account and save it for college
Budget it into his savings account for use at a later time
Spend it on something random, because it's not OK to have leftovers in a Zero-Based Budget
Pretend it doesn't exist
Which style of budget is best suited for someone who chronically overspends on their wants by charging expenses on their credit card?
50/30/20
Zero-Based
Cash Envelope
Wealth Management
For most American households, the largest expenses in their budget will likely be...
Clothes, Entertainment, Food
Food, Housing, Transportation
Food, Insurance, Transportation
Clothes, Food, Housing
Complete this sentence: If your employee compensation is structured as a salary, ...
You will earn more for each additional hour you work
You will always out-earn someone who is paid a wage instead
You have agreed to work for a predetermined amount of money
You will not have taxes removed from each paycheck
At your part-time job, you receive net pay of $400 per month. Each month you automatically save $100, and then you budget $50 for your cell phone, $50 for lunch at school, and $150 for fun with your friends. What is the end result of your budget?
A surplus of $750
A surplus of $50
A deficit of $750
A deficit of $50
Which piece of advice around saving and budgeting is BEST?
If you have a budget, you don't need to save
Follow your budget each month, and if you end up with a surplus, that money goes into savings
Budget for your savings first each month, and then design the rest of your plan around the remaining money
Use a budget each month, but do your saving one time per year
Why is a budget designed without any category for "fun" or "entertainment" likely to fail?
You'll likely spend at least a little on these things anyway, and then you'll be left with a deficit in other categories
Your app or spreadsheet will come preloaded with those categories, so you cannot skip them
These categories are tax deductible, so you'll be losing money if you don't spend on them
These categories allow you to "pay yourself first," so they're the most important
A core characteristic of a "gig" job is that you...
Are paid only in cash and do not pay taxes
Complete short-term work for many different clients
Travel frequently for work
Cannot earn above a certain amount of money
Which statement about the gig model is correct?
The gig model provides LESS scheduling flexibility and FEWER benefits such as retirement plans or health insurance
The gig model provides LESS scheduling flexibility but MORE benefits such as retirement plans or health insurance
The gig model provides MORE scheduling flexibility but FEWER benefits such as retirement plans or health insurance
The gig model provides MORE scheduling flexibility and MORE benefits such as retirement plans or health insurance
If working in the gig economy becomes your only source of income, which option is best for managing your uneven cash flow?
Track your bills for a few months and then set aside surplus funds for leaner months
Spend as much as you want and then double your hours to make up for it
Invest all of your earnings in the stock market
Set aside $20 a month in case of an emergency
When working in the gig economy, what statement is true regarding your payroll taxes?
You do not have to pay any payroll taxes
You can postpone paying your payroll taxes for up to a year
You only have to pay half of your payroll taxes for Social Security but not for Medicare
You must pay your entire payroll tax to cover Social Security and Medicaid
Nessa is moving to Los Angeles in a few months. She knows it will be expensive, so she's looking for a roommate. In which budget areas will she likely save money by having a roommate?
Rent, utilities, insurance
Rent, groceries, cell phone plan
Rent, utilities, furniture
Rent, entertainment, parking
What is the purpose of an apartment lease?
It provides the budget you'll use for all of your household expenses
It outlines the amount of rent you'll pay, when it is due, and key obligations and rights of living in the property
It provides insurance if any guests to your apartment are injured on the property
It makes it illegal for your landlord to evict you from the property
When moving into a new apartment, when should you expect to pay a security deposit?
Before you sign the lease
At the time you sign the lease
Any month in which you cause damages to the apartment
When the lease expires and you've left the apartment
Abraham has two job offers, located in cities about 5 hours away from one another. His mom told him he should consider not only his starting salary ($46,000 at each job) but also the cost of living in each city. City B has a cost of living about 30% higher than City A. How might his decision impact his budget?
City A will be more expensive but probably more fun and exciting
He won't have enough money to live in City B, so City A is his only option
If he chooses City B, a higher fraction of his income will go toward paying for essentials
If he chooses City A, he will not need to budget; if he chooses City B, he will need to budget
Young adults are more often choosing to rent instead of buy a home because...
Monthly rent payments are always lower than monthly mortgage payments
Landlords give young people better rates on apartments than older people can qualify for
They're graduating with a lot of student debt they must pay off, so it takes longer to save a down payment
Renting is a better long-term investment strategy
As a renter in an apartment building, the utility MOST likely to be already included in the cost of your monthly rent is...
Streaming services
Garbage
Electricity
Internet
You just moved to a new city and are researching different transportation options. You should consider the following factors EXCEPT…
Convenience and budget
Reliability and time schedules
Decor and style
Distance and commute time
Gaby lives one hour away from work and wants to make the most of her commute time to work on her business plan for her side hustle. Which mode of transportation makes the most sense for her while also saving on commute costs?
Driving her car
Biking to work
Taking an Uber
Taking the train
What is one disadvantage of leasing a car compared to financing a car?
You have higher monthly payments
You have a certain mileage limit on the car
You can only lease used cars
You won't be able to drive it farther than a 10 mile radius from your house
Which of the following statements about vehicle depreciation is FALSE?
A new car typically loses about 10% to 15% of its value by the time you drive off from the dealership
The biggest depreciation happens within the first few years of new car ownership
You can avoid depreciation by getting the most expensive insurance plan
Vehicle depreciation is defined as the reduction in value of the car as time passes
What is the most accurate comparison of pros and cons between purchasing a new car versus a used car?
New cars can be bought at a lower price, but often require more maintenance costs than used cars.
New cars don't have damage from a previous owner, but only used cars typically come with a warranty.
Used cars can be bought at a lower price, but often require more maintenance costs than new cars.
Used cars can be bought at a lower price, but will depreciate faster than new cars.
When selecting your car payment plan, the _____ your loan term is, the lower your monthly bill will be. However, your overall interest will be ______.
longer; higher
shorter; higher
longer; lower
shorter; lower
What is the BEST option that you can try to cut down on commuting costs?
Take the longest route to work
Join a rideshare or carpool
Purchase a new car
Only go to work once a week
What is the BEST way to track your spending on food?
Gather monthly receipts from only grocery stores
Gather monthly receipts from only restaurants
Compare monthly receipts from grocery stores and restaurants
Check your bank account transactions for fast food spending
All of the following options are ways to avoid overspending at the grocery store EXCEPT…
Look at unit price.
Create a shopping list.
Purchase the first item you see at eye level
Use a shopping basket.
How is unit price calculated?
Subtract number of items from total cost
Add total cost and number of items
Divide total cost by number of items
Multiply the cost of a singular item by the number of items in a package
Which of the following package deals is a better buy according to unit price?
$5.73 for 3 cans
$11.44 for 8 cans
$13.55 for 5 cans
$14.28 for 6 cans
What is a benefit of using digital coupons?
Digital coupons generally provide larger discounts than paper coupons
Digital coupons typically have longer expiration dates than paper coupons
You can try the most popular product at a reduced price
You can try a brand-new product at a reduced price
The following options are reasons why Gen Z might eat out more often EXCEPT...
Healthy and diverse options of meals
Convenience of fast-paced apps
Socialization and sharing with friends
More budget-friendly
