Font size
WorksheetsEPF Unit 6 Budgeting test review
Total questions: 62
Worksheet time: 45mins
Spending more money than one takes in.
Deficit
Surplus
Premium
Revenue
Money taken from your gross paycheck for taxes.
Withholding
Premium
Interest
Dividend
Income after taxes is also known as:
Net Income
Gross Income
Additional Income
Adjusted Income
Remaining income after taxes and mandatory expenses.
Discretionary Income
Disposable Income
Remaining income after taxes.
Discretionary Income
Disposable Income
Payment for a unit of labor (usually hourly).
Wage
Salary
What is the money borrowed that must be repaid, usually with interest?
loan
check
checking account
savings account
Which statement is TRUE about car loans?
Long-term loans are the best because you save money over time.
Short-term loans offer you the lowest monthly payment, but you pay more money over time.
The lower your down payment, the lower the total amount you end up owing on your loan.
Long-term loans offer you the lowest monthly payment, but you pay more money over time.
Having a good credit score is important because ___________.
it can impact your ability to get a driver’s license
it can impact your ability to get bank loans
it can impact how much you will have to pay the government in taxes
it can impact how much you will have to pay for college
What is the initial payment you make on something you have bought on credit?
Down Payment
First Payment
Final Payment
How does the 50-30-20 budgeting strategy divide monthly income?
50% for necessities
30% for savings
20% for wants
50% for necessities
30% for wants
20% for savings
50% for wants
30% for necessities
20% for savings
50% for wants
30% for savings
20% for necessities
Which budgetary expenses are the same and due on the same day each month?
Non-recurring expenses
Whammy expenses
Variable expenses
Fixed expenses
What type of expense would your annual Amazon Prime membership fee be?
Non-recurring expense
Whammy expense
Variable expense
Fixed expense
What is it called when you make a budget and allocate every cent of your paycheck?
50/30/20 budget
Zero-based budget
Pay yourself first budget
Who would most likely want to lease a car?
Someone who wants to earn equity
Someone who wants a lower monthly payment
Someone who wants to own a piece of property
Someone who doesn't mind driving an older car
What is the benefit of buying a car with a car loan?
Lower monthly payment
Driving a newer car every 3-5 years
No monthly payments after the loan is paid
The car is under warranty for the length of ownership
Which of the following does NOT determine your car payment?
Amount of down payment
Length of loan
Credit score
Cost of insurance
What is NOT a cost of owning a car besides the loan payment?
Gas
Principal
Insurance
Maintenance
What would be a benefit of renting a home?
Flexibility to move after lease end
Higher monthly payment
Renter pays for repairs to home
Builds equity
What is a benefit of owning a home?
Typically higher monthly payments
Required property tax payments
Time and cost of home maintenance
Earning equity while making payments
Which is not a characteristic of a conventional home loan?
PMI required if putting less than 20% down
Must have a FICO score of 640
Government insured and no down payment required
Loans up to $647,200
What type of mortgage loan has an interest rate that remains the same for the length of the loan?
Adjustable rate loan (ARM)
Fixed rate loan
FHA loan
VA loan
Typically, to get a mortgage/home loan, you will need all of these things EXCEPT:
Down payment
Pay stub
W2s and 1040s from 2 years
Home owners insurance policy
What is the initial upfront partial payment on a loan?
down payment
principal
equity
interest
What is the amount of money you borrow when you take out a loan?
down payment
principal
equity
interest
What is the percentage the bank charges you for loaning you money?
down payment
principal
equity
interest
What is the difference between what you owe on your mortgage and what your home is actually worth?
down payment
principal
equity
interest
What is a loan with scheduled payments and a fixed end date, where each payment pays both interest and principal?
equity
underwater
amortization
foreclosure
What is it called when you owe more on your mortgage than your home is worth?
Equity
Underwater
Amortization
Foreclosure
What is it called when a borrower stops paying their mortgage and the lender sells the home to recoup their losses?
equity
underwater
amortization
foreclosure
Which expense do financial experts suggest should be about 30% of your monthly income?
savings
food
housing
transportation
What percent of your income should be your goal to save and put into retirement? (according to your budget project)
at least 10%
at least 50%
at least 30%
at least 25%
An expense that does not change from month to month.
Variable expense
Fixed expense
Unexpected expense
What is a variable expense?
An expense that changes every month.
An expense that is unexpected.
An expense that is the same month to month.
Money earned after taxes and other deductions.
Net income
Gross income
Monthly income
What is the rule that says you should always set aside a portion of your income to save?
Pay yourself first.
Pay your bills first.
Spend what you want first.
What do families spend most of their money on?
Transportation
Housing
Food
What is it called when you don't have enough money?
Shortage
Overage
Balance
Which of the following is NOT a strategy you can use to save money on groceries?
use a small cart
listen to music while shopping
go shopping when you are hungry
make a list
Which of the following are things to budget when owning a car?
Maintenance and Repairs
Gas
Insurance
All of these are important to budget
Month after month, Jessica is overspending in her budget and decreasing her savings account balance as a result. Which action would you recommend she take immediately?
Write a new lease so she is paying 25% less in rent each month
Stop paying her credit card bill and put the money into savings
Start packing her lunch from home every day instead of dining out
Quit her job so she an look for one that pays more
If Linus is following a 50/30/20 Budget and takes home $1000 per pay period, how much is he budgeting for his WANTS?
$500
$300
$200
$1000
Which of the following is an effective strategy for personal saving?
Wait until the end of the month and save whatever is left in your checking account
Save a certain percentage of each paycheck and deposit it directly into a savings account
Cover all of your wants and needs and save whatever is left over
Take out a payday loan so you can save before you receive your paycheck
Fill in the blanks with the correct responses. If you follow the 50-30-20 rule of budgeting, you'll be putting 50% of your monthly income toward _______________, 30% of your monthly income toward _____________, and 20% of your monthly income toward ______________.
Needs, wants, savings
Savings, needs, wants
Needs, savings, wants
Wants, needs, savings
Experts recommend that you accumulate enough to cover 3 to 6 __________________ of expenses in your emergency fund.
Days
Weeks
Months
Years
You overhear your Aunt Tina tell your mom that she, her husband, and their kids are "living paycheck to paycheck." What does Aunt Tina mean by that?
Aunt Tina gets a paycheck one month, and her husband gets a paycheck the next month; they alternate pay periods
Aunt Tina and her family don't have any money saved, and their paychecks are just barely covering monthly expenses
Aunt Tina and her family have high paying jobs and don’t worry much about money
Aunt Tina only receives paper paychecks instead of direct deposit
Leila just graduated from college and is comparing a few different cities to move to.
Which of these factors is the LEAST important thing for her to consider right now?
Average cost of Uber, Lyft, or taxi fare
Employment opportunities
Food and grocery store options in the area
Average rent for an apartment
You are putting together your first post-graduation budget.
Your net pay is $2,500 per month and you estimate that your monthly expenses will be $2,625.
How would you describe your budget?
You have a surplus of $2,500
You have a deficit of $2,625
You have a surplus of $125
You have a deficit of $125
Isaiah has a summer internship at a technology company and is paid $3,000.
After Federal and state taxes, Social Security, and Medicare are deducted, his take-home pay is $2,500. Which of the statements below is correct?
His gross pay is $3,000 and net pay is $2,500
His gross and net pay are $2,500
His gross pay is $2,500 and net pay is $3,000
His gross and net pay are $3,000
For two months in a row, Aaron realizes he has a budget deficit of roughly $175.
Which of these options makes the most sense for him to fix his problem?
Sell his current car and get a less expensive vehicle
Contribute $100 less to savings each month and $75 less to his retirement fund
Cancel one of his streaming video subscriptions and go out to dinner three fewer times each month with friends
Start paying just the minimum monthly payment on his student loan and credit card debt, instead of the extra he's been contributing
You're considering moving into a 3 bedroom apartment with 2 roommates, rather than living on your own post-college. Which of your expenses would likely decrease by having roommates?
Cell phone bill
Rent
Bedroom furniture
Groceries and eating out
Which description is most accurate for a Zero-Based Budget?
You spend your checking account balance down to $0 every month
You put every dollar of your net pay into a budget category each month
You pay every one of your debts down to $0 every month
You spend your saving account balance down to $0 every month
Which one of these expenses most likely represents a VARIABLE cost in someone's budget?
Student loan payment
Rent
Electricity bill
Car insurance premium
Which one is the amount of money that a person makes per hour?
wage
gross pay
net pay
salary
Match the following
Your life is significantly harder if you don't have it
a need
Put a fraction of your paycheck into savings before you pay your bills
"pay yourself first"
A person who does short-term work on their own schedule.
gig worker
A promise that the car company will pay for repairs
warranty
Iman drives for Uber. Who pays her taxes, insurance, and retirement?
Iman pays them
Uber takes them out of her paycheck.
Each rider in her car contributes to them.
The app store that she uses
What is one benefit of buying a car instead of leasing?
You will have higher monthly payments.
You will have better safety ratings.
You will have lower monthly payments.
You can build up trade-in or resale value.
What is one benefit of leasing a car instead of buying?
You will have higher monthly payments.
You will have lower monthly payments.
You will own the car at the end.
Your insurance will probably be cheaper.
What is one good thing about buying a new car?
It is cheaper.
There is a warranty.
You will spend more time at the mechanic.
You aren't sure who has owned the car.
What is one good thing about buying a used car?
It is cheaper.
There is a warranty.
You will spend more time at the mechanic.
You aren't sure who has owned the car.
Match the following
One box of cereal for $2.25
$2.25 per box
2 boxes of cereal for $5
$2.50 per box
3 boxes of cereal for $6
$2 per box
4 boxes of cereal for $11
$2.75 per box
5 boxes of cereal for $10.50
$2.10 per box
