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WorksheetsPersonal Finance Chapter 2 Test - Ramsey Classroom
Total questions: 37
Worksheet time: 19mins
Although the majority of Americans think budgeting is important, about ____ of Americans actually use a budget.
75%
50%
23%
35%
Which of the following is NOT a component of a budget?
Credit score
Saving
Income
Giving
Online budgeting apps are more effective than budgeting with pen and paper.
True
False
What are the Four Walls?
Utilities, college fund, restaurants, and car insurance
Cell phone bill, car insurance, shelter, and money for the movies
Food, utilities, transportation, and college fund
Food, utilities, shelter, and transportation
How many categories should you have in your budget?
15 or more
No limit; use as many as you need to keep your budget accurate!
No more than 10
At least 3
How often should you create a budget?
Daily
Weekly
Monthly
Biannually
If you get married, only one person is responsible for budgeting.
True
False
What does a budget show you?
How much you need to save
How much money you plan to come in and go out during the month
How much money you need to earn
How much money you spent last month
Detailed categories on your budget will help you make better spending decisions.
True
False
A budget says what will happen with your money, while a cash-flow statement shows what already happened.
True
False
How many months does it usually take for your budget to start working as a budget should?
Three
Five
Four
One
Your money personality can affect your ____.
Attitude towards budgeting
Choice of bank
Personal values
Ability to budget
Research shows that nearly half of Americans (46%) feel stress and anxiety about the amount of ____ they have.
Money
Debit cards
Categories in their budget
Personal debt
Going to the movies is an example of what types of expenses?
Intermittent and variable
Discretionary and variable
Discretionary and fixed
Intermittent and fixed
Net income is the amount you get paid before taxes.
True
False
Why is tracking your expenses throughout the month important?
It allows you to delete categories you don't like.
It gives you insight into whether you're sticking to the budget you set.
It helps you pull money from your savings to spend in other categories.
It really isn't that important in the long run.
What kind of money counts as income?
Only the money you make at your job
All money that you receive, including money from your job and gifts like birthday money
Money in your savings account
Only money deposited into your bank account
What is a way to stay accountable to reaching your financial goals?
Finding a person you trust to help keep you on track with your money goals
Hiring a financial advisor to make your decisions about money for you
Looking at the budget you set at the end of the month
Creating specific categories in your budget
A common misconception is that budgeting will keep you from you from having fun, when in reality a budget...
Adds more stress to your life
Means there are no rules, you are free to use your money however you want
Restricts your fun completely
Gives you permission to spend
The first priority in your budget should be ____.
Giving
Spending
Saving
Investing
When is the right time to start creating and living by a budget?
Right now, it's never too early!
When you start researching colleges and the costs that come along with it
Once you have a job with an income
When you decide it's time to buy a car
What should you do if you overspend in one category of your budget?
Adjust your budget by removing money from other spending categories.
Just leave it. It will probably work out fine.
Take money from the Giving category. You're giving to yourself!
Ask a friend for the money you overspent.
Commission is when you make money based on the percentage of ____.
Total sales
Investments
Budgets
Items sold
What is a good way to make sure you're creating a budget that's realistic?
Make sure you create a budget every single day.
Make sure your budget is perfect before starting. If it isn't just right, don't use it.
Check your calendar so you can plan for upcoming monthly expenses.
Make sure you have enough money in your savings account to pull from if you overspend.
The primary reason people don't budget is because they lack the behavior to stick to a budget.
True
False
Your monthly rent payment is an example of a variable expense.
True
False
The best way to budget is...
By using a digital app
Creating a spreadsheet
The way that works best for you
On paper
What is the envelope system?
It's a method of budgeting that uses envelopes labeled with specific budget categories for your cash.
It's a systematic approach to budgeting with a digital app that organizes categories based on qualitative amounts.
It's a way to budget that involves putting a credit card in each envelope to use for that category.
It's a system that involves writing your entire budget on an envelope.
If you have an irregular income, budgeting won't work for you.
True
False
Why is budgeting so important?
It's a way to make sure all your money is spent by the end of the month.
It helps you figure out the best way to justify purchases that maybe aren't necessary.
It gives you control of your money and sets you up for financial success in the future.
It helps you brush up on your math skills.
SHORT ANSWER QUESTION: List the Four Walls. What priority are those in your budget.
The four walls are: utilities, college fund, restaurants, and car insurance. These should come after giving and saving, but before all other categories in my budget.
The four walls are: cell phone bill, car insurance, shelter, and money for the movies. These should come after giving and saving, but before all other categories in my budget.
The four walls are: food, utilities, transportation, and college fund. These should come after giving and saving, but before all other categories in my budget.
The four walls are: transportation, food, shelter, and utilities. These should come after giving and saving, but before all other categories in my budget.
SHORT ANSWER QUESTION: Explain the difference between a fixed expense and a variable expense, and include an example of each.
A fixed expense is an expense that is the same amount every month, like rent. A variable expense is one that fluctuates every month, like gas for my car.
A fixed expense is an expense that is the same amount every month, like groceries. A variable expense is one that fluctuates every month, like my cell phone bill.
A fixed expense is an expense that is the same every month, like utilities. A variable expense is one that fluctuates every month, like groceries.
A fixed expense is an expense that is the same every month, like rent. A variable expense is one that fluctuates every month, like my car payment.
SHORT ANSWER QUESTION: What are some key components of successful budgeting?
Creating the budget, finding a system that works for me, adjusting my budget depending on how the month went, and sticking to the budget.
Creating the budget, tracking my spending, finding a system that works for me, and sticking to the budget.
Creating the budget, tracking my spending, finding a system that works for everyone, adjusting my budget depending on how the month went, and sticking to the budget.
Creating the budget, tracking my spending, finding a system that works for me, adjusting my budget depending on how the month went, and sticking to the budget.
SHORT ANSWER QUESTION: Describe irregular income and give examples.
Irregular income fluctuates from month to month. It isn't a variable amount every two weeks or month. Examples of irregular income are commission-based jobs, seasonal retail jobs, grass cutting businesses, or baking side hustle.
Irregular income fluctuates from month to month. It isn't a fixed amount every two weeks or month. Examples of irregular income are commission-based jobs, seasonal retail jobs, grass cutting businesses, or baking side hustle.
Irregular income stays the same from month to month. It is a fixed amount every two weeks or month. Examples of irregular income are commission-based jobs, seasonal retail jobs, grass cutting businesses, or baking side hustle.
Irregular income fluctuates from month to month. It isn't a fixed amount every two weeks or month. Examples of irregular income are teaching students, coaching players, retail jobs, or baking side hustle
SHORT ANSWER QUESTION: What makes a budget a zero-based budget?
When my income minus my expenses (giving, saving, and spending) equals zero.
When my income minus my assets (giving, saving, and spending) equals zero.
When my income minus my expenses (saving and spending) equals zero.
When I spend all of my money by the end of each month.
ESSAY QUESTION: What's an example of an unexpected expense that may occur? How would you adjust your budget to ensure that you don't overspend that month?
Ummm.... WHAT?!
Honestly, I have no idea what you're talking about!
I can do this, I think... I might need you to go over it just in case.
Umm... I might be able to answer part of this, DEF NOT ALL OF THIS!
I can do this!!
ESSAY QUESTION: Explain cash-flow statements. How do they work and what specifically do they show you? Give examples of how a cash flow statement will help you adjust your budget for the following month.
I can do this, no problem!!
Umm... can you go over this?! I'm so confused!
I might be able to figure it out, but can you over it that way I know for sure.
WHAT ARE YOU SAYING!?!?! THIS IS FOREIGN TO ME!!
WHAT EVEN IS A CASH-FLOW STATEMENT?! DID THEY EVEN TALK ABOUT THAT!?!
