Budgeting Basics
What is a budget?
A. A way to borrow money
B. A plan for how to use your money
C. A savings account
B. A plan for how to use your money
What is the BEST definition of a need?
A. Something you buy for fun
B. Something you must have to live, like food or shelter
C. Something you want to collect
B. Something you must have to live, like food or shelter
Which of the following best defines income?
A. Money you borrow from a bank
B. Money you spend on needs and wants
C. Money you earn or receive regularly
C. Money you earn or receive regularly
The type of account is used for daily spending
a) Savings account
b) Checking account
c) Credit account
b) Checking account
When you look at different prices before buying something
a) Impulse buying
b) Comparison shopping
c) Sale
b) Comparison shopping
What does “budgeting” mean?
A. Spending money without a plan
B. Borrowing money from the bank
C. Making and following a money plan
C. Making and following a money plan
Which item is a want rather than a need?
A. Drinking water
B. Warm winter coat
C. Cell phone with unlimited data
C. Cell phone with unlimited data
It is the reason to start saving even when you have a low income
A. It prevents you from paying taxes
B. It build financial habits and prepares for emergencies
C. It makes it easier to borrow money
B. It build financial habits and prepares for emergencies
The extra money earned from saving or charged when you borrow money
a) Debt
b) Interest
c) Credit
b) Interest
What is it called when something is being sold for a lower price?
a) Discount
b) Sale
c) Purchase
b) Sale
What does the 50-30-20 rule help you do?
A. Spend more on wants
B. Avoid paying taxes
C. Plan how to use income wisely
C. Plan how to use income wisely
What is the difference between needs and wants?
A. Needs cost more than wants
B. Needs are only things adults buy
C. Needs are essential for life; wants are nice to have but not required
C. Needs are essential for life; wants are nice to have but not required
This type of bank account is designed to keep your money safe and grow it through interest.
A. Savings account
B. Checking account
C. Stock Exchange
A. Savings account
The money taken from your paycheck by the government
a) Credit
b) Income tax
c) Debt
b) Income tax
The key to making smart purchases?
a) Buying whatever you like
b) Planning and budgeting
c) Using credit for everything
b) Planning and budgeting
Which part of the 50-30-20 rule is for savings?
A. 20%
B. 30%
C. 50%
A. 20%
Why is it important to separate needs from wants when creating a budget?
A. So you can track your credit card use
B. To decide how much to spend on clothes
C. To make sure essential expenses are paid first
C. To make sure essential expenses are paid first
If you work 10 hours at $15 an hour, this is the total amount you earn before taxes.
A. $150
B. 200
C. 300
A. $150
The type of account helps you track your daily purchases and expenses
a) Checking account
b) Savings account
c) Credit account
a) Checking account
What does "credit" mean?
a) Borrowing money and paying it back later.
b) Getting money as a gift.
c) Spending money you don't have.
a) Borrowing money and paying it back later.
Why is budgeting important?
A. To increase debt
B. To lose money faster
C. To manage spending and save money
C. To manage spending and save money
An example of a misunderstanding of the difference between needs and wants
A. Choosing to buy generic food brands to afford medication
B. Skipping a monthly bus pass to upgrade to the latest phone
C. Splitting your paycheck between rent, groceries, and savings
B. Skipping a monthly bus pass to upgrade to the latest phone
The rule suggests you should spend 50% of your income on needs, 30% on wants, and save 20%
a) 50-30-20 Rule
b) 60-20-20 Rule
c) 70-20-10 Rule
a) 50-30-20 Rule
When you owe money and can’t pay it back
a) Budget
b) Debt
c) Credit
Debt
What does the 50-30-20 rule suggest for savings?
a) You should save 50% of your income
b) You should save 20% of your income
c) You should save 30% of your income
b) You should save 20% of your income