WorksheetsDay Eight: Financial Planning and Budgeting Quiz
Total questions: 20
Worksheet time: 10mins
What is an example of a short-term financial goal?
Saving enough money to buy a concert ticket
Raising money for a down payment on a boat in 6-7 years
Buying a home
Raising money to pay for college in two years
What is the first step in preparing a budget?
Creating financial goals
Tracking income and expenses for a few months
Identifying fixed and variable expenses
Developing the habit of saving regularly
What does discretionary income refer to?
Income that is used to pay taxes
Income that is allocated for fixed expenses
Income that remains after subtracting essential expenses
Income that is saved for retirement
What is the most important consideration when creating a budget?
The person’s needs
The person’s investment plans
The person’s wants
The person’s savings goals
What should a person do if they run out of cash at the end of each month?
Increase their income
Reexamine their budget and ensure expenses are less than income
Stop saving money
Take out a loan
What is a strategy to meet a budget savings goal?
Pay yourself first
Use credit cards for purchases
Spend less on fixed expenses
Invest in stocks
What is an example of being a wise consumer?
Spending all discretionary income on luxury items
Ignoring price comparisons
Using discount coupons when shopping
Buying the newest products regardless of cost
What should a person consider when buying cell phone insurance?
The popularity of the insurance company
The brand of the phone
The cost of the annual insurance premium compared to the cost of buying a new phone
The number of phones insured by the company
What is a 529 plan used for?
Saving for retirement
Paying for qualified education expenses
Buying a home
Investing in stocks
What is one strategy to reduce the balance on a college loan?
Ignore the loan until graduation
Begin regular interest payments while still in college
Take out another loan to pay off the balance
Increase spending on discretionary items
What is a major concern about retirement in the US?
Retirement plans are no longer available
People are retiring too early
Social security benefits are increasing
People are not saving enough for living expenses needed during retirement
What is the process called when transferring retirement money from one job to another without paying a tax penalty?
Withdrawal
Rollover
Investment
Deposit
What is an example of a long-term financial goal?
Raising money to pay for college in two years
Saving enough money to buy a concert ticket
Buying a home
Paying off $5,000 in credit card debt in two years
What should a person do before creating a personal budget?
Keep a record of expenses for a minimum of one month
Pay off all debts
Invest in stocks
Open a retirement account
What is the benefit of starting retirement savings early?
The saved money will have more time to grow
It reduces monthly expenses
It eliminates the need for a budget
It guarantees a higher social security benefit
What is an example of a tax-deferred investment?
An investment where taxes are paid upfront
An investment that requires monthly tax payments
An investment where taxes are paid when the money is withdrawn
An investment that is exempt from taxes
What should a person do if their financial goals change?
Stop saving money
Ignore the changes
Adjust their budget
Increase discretionary spending
What is one reason many people choose to save their money at a bank?
Banks provide free financial planning services
Banks offer higher interest rates than investments
Deposits are insured up to the legal limit at member FDIC banks
Banks guarantee a fixed return on savings
What is a strategy to increase net worth over time?
Using credit cards for purchases
Investing in stocks, bonds, and property
Avoiding all investments
Spending discretionary income on luxury items
What should a newlywed couple do if they want to purchase a home in the next five years?
Spend discretionary income on vacations
Ignore budgeting and focus on earning more income
Create a budget that prioritizes savings
Invest all their money in stocks
