Needs vs Wants Comprehension Questions 6.7.pdf

Budgeting 6.7 Needs vs. Wants...

Budgeting 6.7 Needs vs. Wants Comprehension Questions Name Needs vs. Wants 1. True or False? The 50/30/20 Rule is the preferred and recommended way that you should think about your monthly budget. a. True b. False 2. Use the following terms to complete the question: WANTS, SAVINGS, NEEDS According to the 50/30/20 Rule for Budgeting, 50% of your budget should be contributed to [needs] , 30% of your budget can go toward [wants] , and 20% of your budget should go toward​ ​[savings]. 3. 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? a. Cancel his cable TV subscription and go out to dinner three fewer times each month with friends. b. Contribute $100 less to savings each month and $75 less to his retirement fund. c. Start paying just the minimum monthly payment on his student loan and credit card debt, instead of the extra he's been contributing. d. Sell his current car and get a less expensive vehicle. 4. True or False? Needs can be defined as basic shelter, basic clothing, and basic food. All the things outside those categories are wants. a. True b. False www.ngpf.org Last updated: 1/30/17 5. Samantha has difficulty understanding the difference between wants and needs - as everything is a need! What are some questions that could be useful to her to help her cut her spending? Yes No Statement How much do I want this item right now? How am I going to pay for this purchase? If I have to charge it or take out a loan, will I be able to afford the monthly payment? Is there a less expensive version or can I buy it used? How many hours of work would it take me to pay for this item? 6. In your personal budget, what does discretionary spending refer to? a. The money that you spend on impulse while at the shops. b. Money that is specifically put aside to pay for essential items such as rent, tax, basic food requirements, basic clothing requirements. c. Money left over (or budgeted) once all essential items have been taken care of. d. There is no place for discretionary spending in a personal budget. 7. For the average American, in what category do they spend the highest percentage of their income? a. Housing b. Food c. Transport d. Travel 8. True or False: The MINIMUM amount you have to pay on loans and credit cards is a need, not a want. a. True b. False 9. The following are wants, not needs (select all that apply): Select Statement Unlimited data plan for your smartphone Monthly subscription for Cable TV A replacement jacket for the one that you have worn for 10 years and is in need of repair Grooming products and cosmetics www.ngpf.org Last updated: 1/30/17 10. Which of the following is a sign that you are making a purchasing decision based on emotion, and not a need? Yes No Statement I need to boost my spirits. I deserve a reward for my hard work. I have to pay the minimum monthly balance for my credit card and student loans. My friends and family would be disappointed if I did not get this. I can't stand having an outdated model, even if it works. I have to pay my electricity bill this month. www.ngpf.org Last updated: 1/30/17