WorksheetsUnit 2 Test
Total questions: 50
Worksheet time: 25mins
A budget is a plan that helps track income and expenses.
True
False
Fixed expenses are costs that change every month.
True
False
Savings should be included as an expense in a budget.
True
False
A budget should only be created once and never adjusted.
True
False
Rent or mortgage payments are examples of fixed expenses.
True
False
Tracking your spending can help identify areas where you overspend.
True
False
Wants and needs are the same thing in budgeting.
True
False
Creating an emergency fund is an important part of budgeting.
True
False
Variable expenses are the same every month.
True
False
A budget can help reduce financial stress.
True
False
Which of the following is a fixed expense?
Groceries
Electricity bill
Rent
Entertainment
What is the main purpose of a budget?
To spend money freely
To track income and expenses
To avoid paying bills
To increase debt
Which of the following is considered a variable expense?
Car payment
Internet bill
Eating out
Insurance premium
A common budgeting guideline is the 50/30/20 rule. What does the '20' typically represent?
Entertainment
Needs
Savings & debt repayment
Housing costs
What is the first step in creating a budget?
Cutting expenses
Tracking income
Making savings goals
Buying a budget app
Which of the following is an example of a 'want'?
Rent
Groceries
Streaming subscriptions
Utilities
If you spend more money than you earn in a month, this is called:
Surplus
Break-even
Deficit
Savings
Why should you review your budget regularly?
To adjust for changes in income or expenses
To spend more money
To remove fixed expenses
To avoid saving
An emergency fund should generally cover how many months of living expenses?
1–2 months
3–6 months
7–12 months
Over 2 years
If your income is 2,500permonthandyourfixedexpensesare 1,200, what percentage of your income is spent on fixed expenses?
30%
40%
48%
50%
A car’s depreciation refers to how much its value decreases over time.
True
False
Which of the following is usually the most expensive way to get a car?
Buying new
Buying used
Leasing
Carpooling
When you lease a car, you are building ownership in the vehicle with each payment.
True
False
Which cost is not included in the 'total cost of ownership' of a car?
Gas and maintenance
Insurance
Registration fees
Concert tickets
A higher credit score can help you qualify for a lower interest rate on a car loan.
True
False
What does liability insurance cover?
Damage to your own car
Injuries or damage you cause to others in an accident
Theft of personal belongings inside the car
None of the above
Comprehensive coverage helps pay for damage to your car from non-collision events like theft, fire, or hail.
True
False
Which factor usually has the greatest impact on your car insurance premium?
The color of your car
Your driving record
The number of passengers you drive
The amount of gas your car uses
It’s always cheaper to buy a car outright in cash than to finance it.
True
False
Before buying a used car, you should:
Skip the test drive to save time
Check the vehicle history report
Only look at the exterior
Assume the dealer has already inspected it
A credit score is a numerical representation of your creditworthiness.
True
False
Paying your credit card bill late can negatively affect your credit score.
True
False
The higher your credit score, the more likely you are to be approved for loans at lower interest rates.
True
False
Closing an old credit card account can sometimes lower your credit score.
True
False
Credit card companies require you to pay the full balance every month.
True
False
Making only the minimum payment on a credit card balance can cause you to pay more in interest over time.
True
False
Applying for too many credit cards in a short period can hurt your credit score.
True
False
Debit cards help you build credit.
True
False
Your payment history is one of the most important factors in calculating your credit score.
True
False
A credit limit is the maximum amount you are allowed to borrow on a credit card.
True
False
Which of the following is considered a good credit score range?
300–499
500–649
650-850
851-1000
Which factor has the biggest impact on your credit score?
Credit mix (types of accounts)
Payment history
Length of credit history
New credit inquiries
What does APR stand for in relation to credit cards?
Annual Percentage Rate
Annual Payment Requirement
Average Payment Ratio
Accumulated Principal Rate
If you only make the minimum payment each month, what happens?
Your balance goes away faster
You avoid all interest charges
You will pay more in interest and take longer to pay off debt
Your credit score automatically increases
Which of the following is NOT a benefit of having a credit card?
Building credit history
Rewards or cashback
Unlimited free money
Emergency purchases
Which type of card is best for building credit if you have none?
Debit card
Secured credit card
Prepaid gift card
Store loyalty card
What should you do if your credit card is lost or stolen?
Ignore it and wait to see if charges appear
Report it immediately to your credit card company
Call the police but not the card company
Do nothing—credit cards can’t be misused
Which of these actions could hurt your credit score?
Paying bills on time
Carrying high balances close to your limit
Keeping old accounts open
What does the term “grace period” on a credit card mean?
The time when you don’t need to make payments at all
The time between your purchase and when interest is charged if not paid in full
The time after your card expires
The maximum time you can keep a credit card
Which of these is the safest way to use a credit card?
Max out your card to build credit quickly
Pay at least the minimum balance only
Use less than 30% of your credit limit and pay on time
Apply for as many credit cards as possible
