Basics Beginner: Building a Budget

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
In planning a budget, which is likely to be the largest expense item?
Choose wisely. There is only one correct answer.
Housing. On average, housing expenses tend to be 20–35 percent of gross family income.
2.
Borrowing money is a way to increase your inflows to your budget.
Choose wisely. There is only one correct answer.
True. Borrowing increases your inflows, even though it will need to become an outflow at some point in the future.
3.
If you want to get ahead financially, which of the following should be true?
Choose wisely. There is only one correct answer.
Your expenses should be lower than your income. When your expenses are lower than your income, you can use the difference for saving and investing, thus enabling you to grow your money and get ahead.
4.
If you earn $30,000 gross, your budget should be based on that $30,000.
Choose wisely. There is only one correct answer.
False. Your budget should be based on your net pay, not your gross pay.
5.
Which of the following is an example of a non-discretionary expense?
Choose wisely. There is only one correct answer.
Transportation costs. While one may think that donations to charity, gifts to individuals, and entertainment costs are non-discretionary, one actually has a great deal of choice as to how much and when one can incur those expenses. On the other hand, one must incur transportation costs in order to earn money to pay for the other expenses.
6.
If you are using an online budgeting tool from a company that regularly attempts to hack its own software, that is ____.
Choose wisely. There is only one correct answer.
Good. As a safety measure, some companies try to hack into their own software to ensure that it is secure.
7.
When a computer or online budgeting tool is described as read-only, what does that mean?
Choose wisely. There is only one correct answer.
It displays data but cannot make transactions with it. Read-only software lets you read but not change the data. This is a security feature.
8.
When your budgeting software sends you a text or email notifying you of a transaction in your financial accounts, that text or email is called an alert.
Choose wisely. There is only one correct answer.
True. Some budget software can alert you when certain things go on in your accounts.
9.
When it comes to using a budget, what does it mean to 'pay yourself first'?
Choose wisely. There is only one correct answer.
Set aside money from your income into a savings plan. Paying yourself first ensures that you are prepared to deal with future financial issues.
10.
In a budget, the key to successful economizing is _______.
Choose wisely. There is only one correct answer.
Setting goals and prioritizing them. The key to successful economizing is setting goals and prioritizing them.