Chapter 2 Assessment PDF

Chapter 2 Assessment MULTIPLE CHOICE Circle the letter next to the correct answer. o 1. Although the majority of Americans think budgeting is important, about of Americans actually use a budget. A. 75% C....

Chapter 2 Assessment MULTIPLE CHOICE Circle the letter next to the correct answer. o 1. Although the majority of Americans think budgeting is important, about of Americans actually use a budget. A. 75% C. 23% B. 50% D. 35% 2. Which of the following is NOT a component of a budget? A. Credit score C. Income B. Saving D. Giving 3. Online budgeting apps are more effective than budgeting with pen and paper. A. True B. False 4. What are the Four Walls? A. Utilities, college fund, restaurants, and car C. Food, utilities, transportation, and college insurance fund B. Cell phone bill, car insurance, shelter, and D. Food, utilities, shelter, and transportation money for the movies 5. How many categories should you have in your budget? A. 15 or more C. No more than 10 B. No limit; use as many as you need to keep D. At least 3 your budget accurate! 6. How often should you create a budget? A. Daily C. Monthly B. Weekly D. Biannually 7. If you get married, only one person is responsible for budgeting. A. True B. False 8. What does a budget show you? A. How much you need to save C. How much money you need to earn B. How much money you plan to come in and D. How much money you spent last month go out during the month FO U N DATI O NS I N PERSONAL FI NANCE | CH APTER 2 ASSESSMENT PAGE 1 O F 6 MULTIPLE CHOICE Circle the letter next to the correct answer. o 9. Detailed categories on your budget will help you make better spending decisions. A. True B. False 10. A budget says what will happen with your money, while a cash-flow statement shows what already happened. A. True B. False 11. How many months does it usually take for your budget to start working as a budget should? A. Three C. Four B. Five D. One 12. Your money personality can affect your. A. Attitude toward budgeting C. Personal values B. Choice of bank D. Ability to budget 13. Research shows that nearly half of Americans (46%) feel stress and anxiety about the amount of they have. A. Money C. Categories in their budget B. Debit cards D. Personal debt 14. Going to the movies is an example of what types of expenses? A. Intermittent and variable C. Discretionary and fixed B. Discretionary and variable D. Intermittent and fixed 15. Net income is the amount you get paid before taxes. A. True B. False 16. Why is tracking your expenses throughout the month important? A. It allows you to delete categories you C. It helps you pull money from your savings to don't like. spend in other categories. B. It gives you insight into whether you're D. It really isn't that important in the long run. sticking to the budget you set. FO U N DATI O NS I N PERSONAL FI NANCE | CH APTER 2 ASSESSMENT PAGE 2 O F 6 MULTIPLE CHOICE Circle the letter next to the correct answer. o 17. What kind of money counts as income? A. Only the money you make at your job C. Money in your savings account B. All money that you receive, including money D. Only money deposited into your bank from your job and gifts like birthday money account 18. What is a way to stay accountable to reaching your financial goals? A. Finding a person you trust to help keep you C. Looking at the budget you set at the end of on track with your money goals the month B. Hiring a financial advisor to make your D. Creating specific categories in your budget decisions about money for you 19. A common misconception is that budgeting will keep you from having fun, when in reality a budget... A. Adds more stress to your life C. Restricts your fun completely B. Means there are no rules—you are free to D. Gives you permission to spend use your money however you want 20. The first priority in your budget should be. A. Giving C. Saving B. Spending D. Investing 21. When is the right time to start creating and living by a budget? A. Right now - it's never too early! C. Once you have a job with an income B. When you start researching colleges and D. When you decide it's time to buy a car the costs that come along with it 22. What should you do if you overspend in one category of your budget? A. Adjust your budget by removing money C. Take money from the Giving category. from other spending categories. You're giving to yourself! B. Just leave it. It will probably work out fine. D. Ask a friend for the money you overspent. 23. Commission is when you make money based on the percentage of. A. Total sales C. Budgets B. Investments D. Items sold FO U N DATI O NS I N PERSONAL FI NANCE | CH APTER 2 ASSESSMENT PAGE 3 O F 6 MULTIPLE CHOICE Circle the letter next to the correct answer. o 24. What is a good way to make sure you're creating a budget that's realistic? A. Make sure you create a budget every C. Check your calendar so you can plan for single day. upcoming monthly expenses. B. Make sure your budget is perfect before D. Make sure you have enough money in your starting. If it isn't just right, don't use it. savings account to pull from if you overspend. 25. The primary reason people don't budget is because they lack the behavior to stick to a budget. A. True B. False 26. Your monthly rent payment is an example of a variable expense. A. True B. False 27. The best way to budget is... A. By using a digital app C. The way that works best for you B. Creating a spreadsheet D. On paper 28. What is the envelope system? A. It's a method of budgeting that uses C. It's a way to budget that involves putting a envelopes labeled with specific budget credit card in each envelope to use for that categories for your cash. category. B. It's a systematic approach to budgeting D. It's a system that involves writing your entire with a digital app that organizes categories budget on an envelope. based on qualitative amounts. 29. If you have an irregular income, budgeting won't work for you. A. True B. False 30. Why is budgeting so important? A. It's a good way to make sure all your money C. It gives you control of your money and sets is spent by the end of the month. you up for financial success in the future. B. It helps you figure out the best way to justify D. It helps you brush up on your math skills. purchases that maybe aren't necessary. FO U N DATI O NS I N PERSONAL FI NANCE | CH APTER 2 ASSESSMENT PAGE 4 O F 6 SHORT ANSWER Use what you've learned in this chapter to answer these questions. o 31. List the Four Walls. What priority are those in your budget? 32. Explain the difference between a fixed expense and a variable expense, and include an example of each. 33. What are some key components of successful budgeting? 34. Describe irregular income and give examples. 35. What makes a budget a zero-based budget? FO U N DATI O NS I N PERSONAL FI NANCE | CH APTER 2 ASSESSMENT PAGE 5 O F 6 ESSAY QUESTIONS Use what you've learned in this chapter to answer these questions. o 36. What's an example of an unexpected expense that may occur? How would you adjust your budget to ensure that you don't overspend that month? 37. Explain cash-flow statements. How do they work and what specifically do they show you? Give examples of how a cash flow statement will help you adjust your budget for the following month. FO U N DATI O NS I N PERSONAL FI NANCE | CH APTER 2 ASSESSMENT PAGE 6 O F 6