WorksheetsCh 2 Review - Budgeting Basics
Total questions: 35
Worksheet time: 1hrs 10mins
What is a Budget?
A list of expenses
Going to the bank
A plan for your money
Spending your money
Although the majority of Americans think budgeting is important, about _______ of Americans actually use a budget.
75%
23%
50%
35%
Which of the following is NOT a component of a budget?
Income
Saving
Giving
Credit score
Online budgeting apps are more convenient than budgeting with pen and paper.
False
True
What are the Four Walls?
Cell phone bill, car insurance, shelter, and money for the movies
Utilities, college fund, restaurants, and car insurance
Food, utilities, transportation, and college fund
Food, utilities, shelter, and transportation
How many categories should you have in your budget?
No limit; use as many as you need to keep your budget accurate!
15 or more
No more than 10
At least 3
How often should you create a budget?
Daily
Monthly
Weekly
Biannually
If you get married, only one person is responsible for budgeting.
True
False
What does a budget show you?
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
How much you need to save
Detailed categories on your budget will help you make better spending decisions.
False
True
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?
Four
Five
One
Three
Your money personality can affect your ______.
Personal values
Choice of bank
Attitude toward budgeting
Ability to budget
Research shows that nearly half of Americans (46%) feel stress and anxiety about the amount of ______ they have.
Personal debt
Debit cards
Money
Categories in their budget
Going to the movies is an example of what types of expenses?
Discretionary and fixed
Intermittent and variable
Intermittent and fixed
Discretionary and variable
Net income is the amount you get paid before taxes.
False
True
Why is tracking your expenses throughout the month important?
It helps you pull money from your savings to spend in other categories.
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 really isn't that important in the long run.
What kind of money counts as income?
Only money deposited into your bank account
All money that you receive, including money from your job and gifts like birthday money
Money in your savings account
Only the money you make at your job
What is a way to stay accountable to reaching your financial goals?
Creating specific categories in your budget
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
A common misconception is that budgeting will keep you from having fun, when in reality a budget . . .
Gives you permission to spend
Adds more stress to your life
Restricts your fun completely
Means there are no rules—you are free to use your money however you want
The top priority/priorities in your budget should be ______.
Investing
Saving
Giving
Spending
When is the right time to start creating and living by a budget?
When you decide it's time to buy a car
Once you have a job with an income
When you start researching colleges and the costs that come along with it
Right now - it's never too early!
What should you do if you overspend in one category of your budget?
Just leave it. It will probably work out fine.
Take money from the Giving category. You're giving to yourself!
Adjust your budget by removing money from other spending categories.
Ask a friend for the money you overspent.
Commission is when you make money based on the percentage of ______.
Items sold
Total sales
Budgets
Investments
What is a good way to make sure you're creating a budget that's realistic?
Make sure your budget is perfect before starting. If it isn't just right, don't use it.
Make sure you have enough money in your savings account to pull from if you overspend.
Make sure you create a budget every single day.
Check your calendar so you can plan for upcoming monthly expenses.
The primary reason people don't budget is because they lack the discipline to stick to a budget.
False
True
Your monthly rent payment is an example of a variable expense.
True
False
The best way to budget is...
Creating a spreadsheet
On paper
By using a digital app
The way that works best for you
What is the envelope system?
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.
It's a method of budgeting that uses envelopes labeled with specific budget categories for your cash.
If you have an irregular income, budgeting won't work for you.
False
True
Why is budgeting so important?
It gives you control of your money and sets you up for financial success in the future.
It's a good way to make sure all your money is spent by the end of the month.
It helps you brush up on your math skills.
It helps you figure out the best way to justify purchases that maybe aren't necessary.
Which of the following best explains the difference between a fixed expense and a variable expense?
A fixed expense remains constant each month, like rent, while a variable expense can change, like utility bills.
A fixed expense can change each month, like groceries, while a variable expense remains constant, like a subscription service.
Both fixed and variable expenses remain constant each month.
Both fixed and variable expenses change each month.
Which of the following best describes irregular income?
Income received at regular intervals
Income that is tax-free
Income that varies in amount and frequency
Income that is fixed and predictable
What makes a budget a zero-based budget?
It starts with a zero balance
It requires no adjustments
It is only used by large corporations
Every dollar is allocated to a specific category
What's an example of an unexpected expense that may occur?
Monthly rent
Grocery shopping
Car repair
Utility bills
