Budgeting

No that one

100

Which of these costs would be the MOST difficult to adjust if you were looking to reduce your expenses?

1. Dining out at local restaurants

2. Loan payment on a new car

3. Expenses for new clothes

4. Postponing a purchase for a big-screen TV

Loan payment on a new car

200

You earn a salary of $40,000 per year and decide to save 20% of your gross pay. You then set a goal of creating  a $16,000 emergency fund. How long will it take for you to achieve your goal?

1. 6 months
2. 1 year
3. 2 years
4. 3 years

2 years

300

Which of the following is a sign that you have a budget deficit?

1. Your savings account balance grows every month.
2. You overdraw your checking account on a consistent basis (with a $34 cost per overdraft).
3. Your checking account balance grows every month.
4. You pay more than the minimum monthly loan payment towards your student loans.

• You overdraw your checking account on a consistent basis (with a $34 cost per overdraft).

400

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?

1.  Average rent for an apartment
2. Food and grocery store options in the area
3. Employment opportunities
4. Average cost of Uber, Lyft, or taxi fare

• Average cost of Uber, Lyft, or taxi fare

500

Greg is trying to decide whether he needs a car or not when he moves to the city. Which of the following would convince Greg to get a car rather than use public transportation?

1. There are several public transportation routes between Greg's apartment and work.
2. The cost of public transportation is less than Greg’s monthly car payment.
3. Greg’s company covers half the cost of his monthly public transportation pass.
4. Using public transportation, Greg’s commute to work one-way is two hours.

• Using public transportation, Greg’s commute to work one-way is two hours.

How about that one

100

Explain Debt Snowball

Ordering your debts from smallest to largest amount owed. Continue minimumu payments on ALL debts, while applying a "snowball" amount to the smallest. once that is paid the minimum payment + snowball are applied to the next smallest minimum and repeats.

200

Explain Debt Avalanche

Ordering your debts from Largest to Smallest interest rate. Continue minimumu payments on ALL debts, while applying a "avalanche" amount to the largest interest rate. Once that is paid the minimum payment + avalanche are applied to the next largest interest rate minimum payment and repeats.

300

Isaiah works for the summer at a technology company and has a salary for the summer of $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?

1.   His gross pay is $2,500 and net pay is $3,000.
2.   His gross and net pay are $3,000.
3.   His gross and net pay are $2,500.
4.   His gross pay is $3,000 and net pay is $2,500.

 His gross pay is $3,000 and net pay is $2,500.

400

You are putting together your first post-graduation budget. Your take-home pay will be $2,500 per month. You estimate your monthly costs to be rent of $900, car related expenses to be $550, entertainment of $200, food expense of $250, cable bill of $75, mobile phone of $100, student loan payment of $400 and other expense of $150. How would you describe your budget after analyzing all of your income and expenses?

1. You have a surplus of $125.
2. You have a deficit of $125.
3. You have a deficit of $2,625.
4. You have a surplus of $2,500.

• You have a deficit of $125.

500

You are interested in renting an apartment after graduating college. You meet with the landlord, complete the application and after checking your credit background and references, the landlord approves your application. In most cases, you will need to provide the landlord with ___________________ at the time you sign the lease in order to get the apartment.

1. First month's rent
2. First and last month's rent
3. $1,000 security deposit to cover any damages to the apartment  
4. First and last month's rent + a security deposit to cover any damages to the apartment

• First and last month's rent + a security deposit to cover any damages to the apartment

I bet we miss this one

100

Which of the following is a BAD budgeting strategy to use if you want to save money at the grocery store?

1. Prepare a grocery list before you go to the store, and avoid buying items that aren’t on the list.
2. Build 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.
3. When comparing similar products, focus on the price only.
4. When comparing similar products, be sure to compare based on unit price.

• When comparing similar products, focus on the price only.

200

Aaron realizes he has a budget deficit of roughly $175 at the end of two months in a row. Which of these options makes the most sense for him to fix his problem?

1. Cancel his cable TV subscription and go out to dinner three fewer times each month with friends.
2. Start paying just the minimum monthly payment on his student loan and credit card debt, instead of the extra he's been contributing.
3. Contribute $100 less to savings each month and $75 less to his retirement fund.
4. Sell his current car and get a less expensive vehicle.

• Cancel his cable TV subscription and go out to dinner three fewer times each month with friends.

300

13.  You're considering moving into a 3 bedroom apartment with 2 roommates, rather than living on your own post-college. Mark which of YOUR expenses would likely decrease by having roommates.

1. Groceries and eating out
2. Rent
3. Cell phone bill
4. Bedroom furniture

• Rent

400

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?

1. Danaisha, because she is focusing on her health, which will have a guaranteed payoff in the long run.
2. Charles, because he's taking efforts to save money by focusing on his needs only.
3. Both, because needs vs wants are determined on an individual basis.
4. Neither, because they should meet in the middle somewhere. Charles should focus more on health, and Danaisha should cut her spending.

• Both, because needs vs wants are determined on an individual basis.

500

You overhear your cousin talking about the importance of creating and sticking to a budget. Which of the following reasons he gives below is actually FALSE?

1. A budget can help you identify any bad spending habits.
2. Using a budget can allow you to work towards your financial goals.
3. Having a budget can help you create an emergency fund.
4. Using a budget can qualify you for special discounts at your favorite stores

• Using a budget can qualify you for special discounts at your favorite stores

Mr Wolfe let's go

100

Franny is a recent college graduate with little budgeting experience. She is trying to stick to her budget but is finding that she continues to have a deficit at the end of each month. Which of the following steps she takes could explain why this keeps happening?

1. Franny uses her net pay when budgeting her money.
2. Franny uses the 50-20-30 rule to allocate her money.
3. Franny tracks her monthly spending at the end of the month.
4. Franny has identified her needs and wants.

• Franny tracks her monthly spending at the end of the month.

200

19. 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?

1. Can I afford this laptop right now?
2. Is this the right time to buy this laptop or will it likely be on sale later?
3. What model laptop is trendy right now with people my age?
4. 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?

• What model laptop is trendy right now with people my age?

300

Which of the following is TRUE about a lease agreement?

1. A lease is an agreement between you and your roommates that you submit to the apartment owner.
2. You never have to pay any fees when you sign a lease. If you do, that means it is a scam.
3. 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.
4. A lease is an agreement that includes details about rent, apartment policies, vacating, etc.

• A lease is an agreement that includes details about rent, apartment policies, vacating, etc.

400

Which statement accurately describes how the 50/20/30 Rule would break down your take-home pay?

1. 50% on flexible expenses, 20% on financial goals, and 30% on living expenses and essentials
2. 50% on financial goals, 20% on living expenses and essentials, and 30% on flexible expenses
3. 50% on living expenses and essentials, 20% on financial goals, and 30% on flexible spending
4. 50% on financial goals, 20% on flexible expenses, and 30% on living expenses and essentials

• 50% on living expenses and essentials, 20% on financial goals, and 30% on flexible spending

500

About how much of your budget should go towards rent/mortgage?

25-35%