Reference no: EM132477179
Questions -
Q1. What is budgeting?
(A) Having money left over at the end of the month.
(B) A plan made in advance regarding the expenditure of money based on available income.
(C) The ability to pay your bills on time.
(D) Having enough money to go out to eat.
Q2. Which of the following is an example of a 'fixed expense'?
(A) Food and groceries.
(B) Mortgage or rent payments.
(C) Charitable contributions.
(D) Gas for your car.
Q3. What is discretionary income?
(A) Commissions or bonuses paid by your employer, or tips received for services provided.
(B) The amount of money you have remaining to put in a savings account at the end of the month.
(C) The money used to make your rent or mortgage payment, or other such expenses.
(D) It is the income that remains after taxes and fixed expenses (such as rent or mortgage, utilities, insurance) are paid.
Q4. The best way to start the budgeting process is to:
(A) Start tracking all of the money you spend for a period of time, usually a month, so that you have an understand of where your money goes.
(B) Automatically deposit money into a savings account with each paycheck.
(C) Pay your credit card balance(s) in full each month.
(D) Curbing your spending on incidental items such as dining out or entertainment.
Q5. In regards to personal finances, "zero-based budgeting" is:
(A) Stopping all spending on incidentals such as dining out or entertainment.
(B) The practice of budgeting every dollar of income received.
(C) A budgeting method where you put 'zero' dollars on your credit card.
(D) The ability to pay all of your bills each month with something left for 'whatever'.
Q6. With an 'envelope' budgeting system, you:
(A) The cash for each month's expenses is taken out and divided into envelopes for each budget category.
(B) For each spending category, your spend only out of the designated envelope.
(C) You stop spending for particular categories of spending once the designated envelope is empty.
(D) All of the above.
Q7. Which of the following are the best tools for budgeting?
(A) Personal financial management software.
(B) A pencil and paper.
(C) Computer spreadsheets.
(D) Any of above. Whatever works best for you.
Q8. With a "rainy day" savings fund, you:
(A) Set aside money for emergencies or essential spending in case of a loss of income.
(B) Set aside money to use to treat yourself to something special when the weather turns bad.
(C) Put a fixed amount of money into a savings account each time it rains.
(D) Save up money to buy an umbrella and other types of rain gear.
Q9. When putting together a budget, which of the following items should you include?
(A) Fixed Expenses.
(B) Discretionary Expenses.
(C) Savings
(D) All of the above.
Q10. What is the most likely reason for a budget to fail?
(A) Buying a pair of shoes you just couldn't resist.
(B) Not using a personal financial planning website or software.
(C) Failing to establish an emergency fund to account for unforeseen expenses.
(D) Not making enough money.