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

Budgeting Answers

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1
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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.
2
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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
3

This pie chart shows a sample weekly budget.

Question illustration
A
$70
B
$75
C
$10
D
$35
4

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.
5

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.
6

From what part of income should someone take savings?

A
what otherwise would be fixed expenses
B
gross income, before other deductions
C
what otherwise would be discretionary income
D
gross income, along with other deductions
7

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
8

When a person invests income, he or she

A
spends no money in the short term and saves it all for the long term.
B
uses money in a way that will increase its value in the future.
C
spends income only on essential needs such as housing.
D
cuts out all discretionary spending for a set period to save money.
9

Why is net income lower than gross income?

A
fixed spending
B
budgets
C
withholdings
D
discretionary spending
10

Which is the best way to achieve long-term financial goals?

A
Spend less on mandatory expenses.
B
Eliminate short-term financial goals.
C
Increase discretionary expenditures.
D
Save more money from net income.

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