Budgeting Answers

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1
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Kerry knows that a new car is in her future.Which would be the best strategy to help her accomplish this goal?

A
contribute to a savings account
B
give up paying for health insurance
C
stop paying the full amount of rent
D
apply for and open a new credit card
2
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Why is net income lower than gross income?

A
fixed spending
B
budgets
C
withholdings
D
discretionary spending
3

Leo’s car broke down, and he must find money in his limited budget to pay the repair bill.Which of the following is the best solution for Leo to handle the unplanned spending?

A
Leo forgoes going out to dinner.
B
Leo forgoes paying the rent on his apartment.
C
Leo forgoes paying his water bill.
D
Leo forgoes paying his electricity bill.
4

When should fixed and variable monthly budgeted expenses first be planned?

a
at the end of each month
d
day by day during the month
a
at the start of each month
a
at least twice per month
5

What type of expense is an example of the cost to drive to and from work?

A
a variable expense.
B
a fixed expense.
C
a short-term expense.
D
a discretionary expense.
6

What effect would a tax increase have on income?

A
It would reduce gross income.
B
It would not affect net income.
C
It would increase net income.
D
It would not affect gross income.
7

A short-term financial goal might include saving for

A
a down payment on a house.
B
a piece of furniture.
C
a child’s college fund.
D
one’s retirement.
8

Why might variable expenses change a great deal at different times of year?

A
Heating and cooling costs might vary considerably.
B
Income taxes and withholdings may increase or decrease.
C
Car loan payments become higher in certain seasons.
D
Discretionary spending may rise when fixed expenses rise.
9

Mindy wants to save money to buy a new couch.Which would be the best strategy for her to accomplish her goal?

A
adopt a dog from a shelter
B
stop paying her credit card bill
C
decrease the budget for basic food needs
D
forgo watching movies online or in the theater
10

Which is an example of an income deduction?

a
an unexpected salary cut
w
wages lost due to illness
v
vacation budget
r
retirement savings

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