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Personal Finance Ch. 2 Budgeting Basics Mrs. R Flashcards | StudBud
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Personal Finance Ch. 2 Budgeting Basics Mrs. R
Personal Finance Ch. 2 Budgeting Basics Mrs. R
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Dave Ramsey Chapter 2
Flashcards
53 cards
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Practice quiz
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Questions
53
Answers
1
What does a budget show you?
How much you need to save
How much money you need to earn
How much money you plan to have come in and go out during the month
How much money you spent last month
2
Doing a budget does not:
Make overspending more likely
Make your money go further
Show if you are overspending
Remove guilt and shame
3
Having more than one bank account is NEVER a good idea since it can complicate money management
False
True
4
Detailed categories in your budget will help you make better spending decisions.
True
False
5
"Pay yourself first" means you should assign a portion of your income to saving & investing.
False
True
6
Which of the following is NOT a component of a budget?
Saving
Credit Score
Giving
Income
7
Net income is the amount you get paid before taxes
True
False
8
Online budgeting apps are more effective than budgeting with pen and paper.
False
True
9
The primary reason people don't budget is because they lack the behavior to stick to a budget.
True
False
10
Rent or a mortgage is a:
Discretionary expense
Fixed expense
Intermittent expense
Variable Expense
11
Why is tracking your expenses throughout the month important?
It helps you pull money from your savings to spend in other categories
It isn't really important in the long run
It give you insight into whether your'er sticking to the budget you set.
It allows you to delete categories you don't like
12
Going to the movies is an example of what types of expenses?
Intermittent and fixed
Discretionary and variable
Discretionary and fixed
Intermittent and variable
13
When you get married, one person should be responsible for budgeting.
False
True
14
A common misconception is that budgeting will keep you from having fun, when in reality a budget....
adds more stress to your life
restricts your fun completely
gives you permission to spend
means there are no rules- you are free to use your money however you want
15
How many categories should you have in your budget?
15 or more
no limit; use as many as you need to keep your budget accurate!
No more than 10 At least 3
16
The number-one cause of divorce in North America today is stress and disagreements over money
True
False
17
What kind of money counts as income?
All money that you receive, including money from gifts, birthday money
Only the money you make at your job
Only money deposited into your bank account
Money in your savings account
18
If you have irregular income, budgeting won't work for you
False
True
19
Eating out is a
Fixed expense
Intermittent expense
Variable expense
Discretionary expense
20
Commission is when you make money based on the percentage of
budgets
items sold
total sales
investments
21
The first priority in your budget should be
giving
spending
investing
saving
22
What is the envelope system?
budget where you put credit card in envelope to use for that category
digital app that organizes categories based on qualitative amounts
It's a system that involves writing your budget on an envelope.
budgeting that uses envelopes labeled with budget categories for your cash
23
A common misconception is that budgeting will keep you from having fun, when in reality a budget . . .
Means there are no rules—you are free touse your money however you want
Adds more stress to your life
Gives you permission to spend
Restricts your fun completely
24
Cash flow plan that assigns an expense to every $ of income, total income
-
total expenses
=
zero
Budget
Named budget
Zero-based budget
25
What should you do if you overspend in one category of your budget?
ask a friend for the money you overspent
adjust your budget by removing money from other spending categories
just leave it. It will all work out in the end.
take money from the giving category. You're giving to yourself!
26
How many categories should you have in your budget?
no limit, use as many as you need to keep your budget accurate
no more than 10
at least 3
15 or more
27
What is a good way to make sure you're creating a budget that's realistic?
check your calendar so you can plan for upcoming monthly expenses
make sure you create a budget every day
make sure you have enough money in savings to pull from if you overspend
make sure your budget is perfect before starting.
28
A budget says what will happen with your money, while a cash-flow statement shows what already happened.
True
False
29
Your money personality can affect your
choice of bank
ability to budget
attitude toward budgeting
personal values
30
What are the Four Walls?
Food, utilities, transportation, and college fund
Food, utilities, shelter, and transport
Utilities, college fund, restaurants and car insurance
cell phone bill, car insurance, shelter and money for movies
31
Which is something that a typical millionaire WOULD DO
Replace things that are not broken
Carry debt
Lease a new car
Spend less money that he or she makes
32
The best way to budget is...
the way that works best for you
creating a spreadsheet
on paper
by using a digital app
33
What is a way to stay accountable to reaching your financial goals?
creating specific categories in your budget
looking at the budget you set at the end of the month
finding a person you trust to help keep you on track with your money goals
hiring a financial advisor to make your decisions about money for you
34
Why is budgeting so important?
It's a good way to make sure your money is spent by the end of the month
It gives you control of your money and sets you up for financial success
It helps you figure out the best way to justify unnecessary purchases
It helps you brush up on your math skills
35
To match your bank statement with your checkbook.
Reconcile
Cash flow
Spending plan
Budget
36
The zero-based budget is the best method of budgeting because:
This type of budget is less complicated
Sticking to a zero-based budget requires less discipline
It ensures that every dollar you make is assigned a purpose
A zero-based budget allows less money for wants
37
Budgets don't work when you:
Overcomplicate things
All of the above
Leave things out
Don't do it
38
Following a zero based budget will help you avoid overspending and impulse purchases.
False
True
39
Although the majority of Americans think budgeting is important, about ___ of Americans actually use a budget.
35%
50%
75%
23%
40
The first priority in your budget should be ____.
investing
spending
saving
giving
41
How many months does it usually take for your budget to start working as a budget should?
one
four
five
three
42
How often should you create a budget?
weekly
monthly
daily
biannually
43
A zero based budget has zero expenses.
True
False
44
Setting up automatic account transfers is the easiest way to build your savings
False
True
45
The primary reason people don't budget is because they lack the behavior to stick to a budget.
True
False
46
Budgeting is crucial to your financial success
False
True
47
Research shows that nearly half of Americans (46%) feel stress and anxiety about the amount of ___ they have.
debit cards
personal debt
categories in their budget
money
48
A zero based budget has more outgo than income.
True
False
49
A written budget, if followed, removes _________ from your finances
Overspending
Management by crisis
all of the above
Guilt
50
Car repairs are a:
Discretionary expense
Fixed expense
Variable expense
Intermittent expense
51
The envelope system works best for managing spending on things that don't have fixed monthly expense
False
True
52
Groceries are a
Discretionary expense
Intermittent expense
Fixed expense
Variable expense
53
When is the right time to start creating and living by a budget?
When you start researching colleges and the costs that go along with it
when you decide it's time to buy a car
Once you have a job with an income
Right now- It's never too early!
