AnswersOK-Personal Financial Literacy S1 – EDGNTY-83861 26-27Budgeting

Budgeting Answers

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1
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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.
2
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Why is net income lower than gross income?

A
fixed spending
B
budgets
C
withholdings
D
discretionary spending
3

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.
4

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.
5

When creating a budget, log fixed expenses

A
before income.
B
after income.
C
after savings.
D
at the top.
6

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.
7

Look at this monthly budget.Monthly Budget

Question illustration
A
Add to fixed expenses.
B
Decrease food expenses.
C
Reduce rent payments.
D
Increase total income.
8

To change gross income, someone would need to

A
save more per month.
B
reduce deductions.
C
earn more money.
D
increase withholdings.
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

In order to stay on track for long term financial goals, money for emergency spending should be taken first from your

A
savings account.
B
discretionary money.
C
fixed expense money.
D
net income.

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