WorksheetsUnit 5: Budgeting & Saving
Total questions: 50
Worksheet time: 25mins
Which of these costs would be the MOST difficult to adjust if you were looking to reduce your expenses?
Loan payment on a new car
Dining out at local restaurants
Expenses for new clothes
Postponing a purchase for a big-screen TV
For most Americans, which budget expense category is largest?
Housing
Food
Transportation
Clothes
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 you to achieve your goal?
2 years
6 months
1 year
3 years
If you are trying to substantially reduce the amount you spend on food, you should try...
Cooking your own food at home for as many meals as possible
Dining at restaurants more often so you don't waste water doing dishes
Eating more snacks on the go and way fewer meals at home
Drinking more coffee and soda so you are not as hungry for food
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
Average rent for an apartment
Food and grocery store options in the area
Employment opportunities
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?
Using public transportation, Greg’s commute to work one-way is two hours
Greg’s company covers half the cost of his monthly public transportation pass
The cost of public transportation is less than Greg’s monthly car payment
There are several public transportation routes between Greg's apartment and work
Which of these boxes of cereal has the LOWEST unit price?
Cereal B, which costs $5.00 for a 32 oz. box
Cereal A, which costs $3.20 for a 16 oz. box
Cereal C, which costs $2.50 for a 10 oz. box
Cereal D, which costs $4.50 for an 8 oz box
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 and net pay are $3,000
His gross pay is $2,500 and net pay is $3,000
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 deficit of $125
You have a surplus of $125
You have a deficit of $2,625
You have a surplus of $2,500
You are interested in renting an apartment after graduating college. You meet with the landlord and complete the application. All of the following may need to be provided when you sign your lease EXCEPT:
A bank account
Proof of employment
First and last month's rent
A security deposit
You are interested in renting an apartment for your senior year in college. What will you most likely need to provide the landlord with at the time you sign the lease in order to get the apartment?
First month's rent and a security deposit
Rent payment for the first three months
An additional list of references and copies of your last three tax filings
A $500 bonus payment for awarding you the apartment
Which of the following is NOT a good budgeting strategy if you want to save money at the grocery store?
Focusing only on the price when comparing similar products
Preparing a grocery list before you go to the store and avoiding buying items that aren't on the list
Building a weekly meal plan around items you already own or items that are on sale that week, rather than just choosing foods you'd like to eat
Focusing on unit price when comparing similar products
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
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?
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
Contribute $100 less to savings each month and $75 less to his retirement fund
Sell his current car and get a less expensive vehicle
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?
Rent
Groceries and eating out
Cell phone bill
Bedroom furniture
Danaisha does all her grocery shopping at organic markets and has a monthly grocery bill of $325. Charles says that Danaisha is wasting her money on wants instead of focusing on needs. He buys in bulk, uses coupons, and shops at Save-More for a monthly bill of $195. Who's budgeting correctly for food?
Both, because needs vs wants are determined on an individual basis
Neither, because they should meet in the middle somewhere. Charles should focus more on health, and Danaisha should cut her spending.
Charles, because he's taking efforts to save money by focusing on his needs only
Danaisha, because she is focusing on her health, which will have a guaranteed payoff in the long run
Bryan is a great cook. He works as an independent contractor and books gigs cooking customers breakfast or dinner in their own homes on the app Cook For You. Who provides Bryan's health insurance and retirement plan?
Bryan has to fund them himself
Each family he cooks for
The owners of the Cook For You app
The Google and Apple app stores
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?
Electricity bill
Rent
Car insurance premium
Student loan payment
What action corresponds to the advice "Pay yourself first?"
Set aside a fraction of your paycheck into a savings account before you start spending
Wait until the end of the month to determine how much you have leftover to save
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 Sanjana is done with college, she is trying to decide whether or not she should buy a new laptop for herself. She has made a preliminary 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?
What model laptop is trendy right now with people my age?
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?
Which of the following is TRUE about a lease agreement?
A lease is an agreement that includes details about rent, apartment policies, vacating, etc.
A lease often has information about your prior housing experience; it's a record that the apartment owner can use to see if you are a good candidate
You never have to pay any fees when you sign a lease. If you do, that means it is a scam.
A lease is an agreement between you and your roommates that you submit to the apartment owner.
The defining characteristic of a job in the gig economy is
Workers complete short-term work for many different clients
Workers receive free phones and wifi connections.
Workers decide how much they wan to pay in taxes.
Workers are paid by the federal government
One way the grocery store tricks you into spending more money than you budgeted for is...
Putting high priced items at eye level and lower cost items above or below eye level
Accepting digital and print coupons
Paying their cashiers and baggers more
Being open early in the morning and late at night
Janine 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 Janine factored in all of the costs associated with car ownership?
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
No, she does not need to include the cost of auto insurance as it is included in her auto loan payment.
Yes, these are the three costs she should expect to pay once she is a car owner
Sadie is a freelance social media specialist. Why is it particularly important that Sadie, and other freelancers like her, have an emergency fund?
Sadie doesn't have guaranteed work every day, so she needs money in case she goes a while between clients
Freelancers charge a very low hourly rate, so Sadie probably doesn't get paid much
Sadie will need a large emergency fund in order to make her monthly insurance payments
Sadie's job requires a lot of expensive specialty equipment that will always need replacing
Juan saved $1,000 from his summer job cleaning pools. Which of these account types would work best for him if he doesn't need access to the money for a number of years AND wants to earn the highest interest rate?
Certificate of Deposit
Money Market account
Checking account
Regular savings account
Which of the following is an effective strategy for personal saving?
Save a certain percentage of each paycheck and deposit it directly into a savings account
Take out a payday loan so you can save before you receive your paycheck
Wait until the end of the month and save whatever is left in your checking account
Cover all of your wants and needs and save whatever is left over
Joelle wants to have an emergency fund to cover 6 months of her expenses. Her monthly gross pay is $4,000 and her monthly expenses are $2,000. If she plans to save 10% of her gross pay each month, how long will it take her to build her emergency fund?
30 months
3 months
9 months
24 months
All of the following statements about bank accounts are true EXCEPT...
Historically, savings accounts earn higher returns than investments in the stock market
If the bank is FDIC-insured, your money, up to the FDIC limit, is safe even if the bank fails
Many banks pay interest on the money you deposit into your savings account
Money in a checking account is usually easy to access via ATM, debit card or check
You are developing a savings plan and using short-, medium-, and long-term goals to motivate you. Which represents possible goals from short-term to long-term? Save for...
A new cell phone, college tuition, a house down payment
Retirement, a house down payment, college tuition
A new cell phone, dinner with friends this weekend, a new bike
Retirement, college tuition, a vacation
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
Which represents the BEST time to start saving for your retirement?
As soon as you have your first full-time job
Right after you pay off your student loans
Once you are debt-free, including paying off all credit cards, auto loans, and your mortgage
At age 45, so you have exactly 20 years until retirement
Experts recommend that you accumulate enough to cover 3 to 6 ________ of expenses in your emergency fund.
Months
Years
Days
Weeks
Which of these is a reason someone might choose to open an online savings account rather than a savings account at a traditional bank?
Online savings accounts typically pay higher interest rates on deposits
Online savings accounts are FDIC insured to a higher limit
Online savings accounts are less likely to make you the victim of identity theft
Online savings accounts are created specifically for people under age 25
Three of these statements best describe a checking account. Which statement best describes a savings account?
This account pays you interest on money you have put away for later to help your money grow
This account offers a convenient way to pay bills and access cash from an ATM
This account is automatically debited when you use a debit card
This account typically allows an unlimited number of transactions per month
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 and her family don't have any money saved, and their paychecks are just barely covering monthly expenses
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 have high paying jobs and don’t worry much about money
Aunt Tina only receives paper paychecks instead of direct deposit
You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?
It is deducted directly from your checking account
Your credit card company covers the cost
Your credit card company provides you with a cash advance to cover the cost
It is deducted directly from your savings account
Fill in the blanks: If inflation is __________ your savings account interest rate then you will be __________ purchasing power.
higher than, losing
higher than, gaining
equal to, gaining
lower than, losing
Jocelyn gets a text alert from the bank that her account balance has dropped below $100 after a series of $20 ATM withdrawals. She has not used her ATM in over a week and wonders what she should do. What would you recommend?
Contact her bank immediately as it appears that her account may have been hacked
Check her wallet to be sure her debit card has not been stolen. If she still has it, then she should not worry.
Wait a week as it is fairly common for the bank to catch mistakes like this
Wait until her monthly statement arrives so she can check to see if those withdrawals are still there
Which of the following transactions will REDUCE your checking account balance immediately?
Using your debit card to pay for groceries at the supermarket
Writing your monthly rent check which you will mail tomorrow
Using your credit card to pay for your school books
Depositing a check at a local bank branch
Which of the following statements is an advantage of online banking?
Using online banking, you can request transfers, pay bills and automate your savings without visiting the bank branch
Once you set up online banking, your bank will waive overdraft, ATM, and monthly fees
Using online banking allows you to earn a higher interest rate
You can only shop online if your bank account has online banking features
FDIC insurance is...
Protection for bank customers’ deposits up to $250,000, guaranteeing their money is still available if the bank goes out of business
Required if you want to do online or mobile banking
Insurance bank branches can buy to protect their business against fraud and scams
Optional coverage consumers can purchase so that their bank deposits remain safe
When signing up for a new checking account, if you answer "Yes" to receive overdraft protection and you have $10 in your account, what is likely to happen if you go out and use your debit card to buy lunch for $12, a movie ticket for $12, and dinner for $15?
You will likely be charged an overdraft fee for one or more of the transactions and also will need to repay the bank for the amount overdrawn
Your account will be closed
Since you requested overdraft protection, the bank will not allow you to overdraw your account so your debit card will be denied
The bank will provide you five days to add funds to your account to cover the overdraft and no fees will be assessed
How often do customers typically receive a bank statement for their checking account?
Monthly
Daily
Weekly
Annually
When signing up for a new checking account you answer "No" and opt out of overdraft protection. On this day, you have $10 in your account and go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?
Since you declined overdraft protection, the bank will not allow you to overdraw your account so your debit card will be declined.
You will likely be charged an overdraft fee for one or more of the transactions and also will need to repay the bank for the amount overdrawn
Your account will be closed
The bank will provide you five days to add funds to your account to cover the overdraft and no fees will be assessed
A person-to-person payment app could be used in each of the following scenarios EXCEPT...
Mia pays Cheesy Pizza Co. for a pizza she orders on their website
Ahmed's soccer coach pays the team's registration fee for a big tournament, and each player then owes him $35 for their share of the registration fee
Rafael writes a check to cover the entire month’s rent, and his roommates Valerie and Carlos pay Rafael for their share of the monthly rent
Tina pays her neighbor $200 for breaking his window with a softball
Fill in the blanks: Direct deposit typically refers to your ______ sending your ___ electronically to your bank account
employer, paycheck
employer, bills
parents, allowance
state government, taxes
All of the following are downsides of being underbanked EXCEPT:
lack of fees associated with banks
lack of access to credit
lost time paying bills
difficulty making cashless purchases
Each of the following is a way to access money in your checking account EXCEPT...
Swipe a prepaid card to pay for your fast food purchase
Write a check to pay the rent on your apartment
Use your debit card to pay for groceries at a Point-of-Sale (POS) terminal
Take out cash using your debit card at an ATM machine
