Chapter 3 - Budgeting - PRE TEST

Expenses that remain the same from month to month.

An item that is bought without previous planning or consideration of the long-term effects.

The envelope system works great for managing spending on things that don’t normally have a fixed monthly expense.

Budgeting is crucial to your financial success.

Having more than one bank account is never a good idea since it can complicate money management.

Your own record of all your transactions.

To match your bank statement with your checkbook.

Which of the following account records would have the most current balance?

A debit card cannot be used for online purchases.

Car repairs are a:

A written cash flow plan.

The zero-based budget is the best method of budgeting because:

Online bill pay allows you to make payments to whomever you wish without having to write a check and send it in the mail

A written budget, if followed, removes _________ from your finances.

Which of the following is something that a typical millionaire would do?

Percentage of Americans living paycheck to paycheck:

Occurs when money is withdrawn from a bank account and the available balance goes below zero.

Non-essential expenses.

Series of envelopes that are divided into categories and are used to store cash for planned monthly expenses.

Doing a budget does not:

The number-one cause of divorce in North America today is stress and disagreements over money.

Rent is a:

Eating out is a:

Your monthly budget should include:

Writing and following a zero-based budget will help you avoid overspending and impulse purchases.

If you write a zero-based budget every month, it is not necessary to reconcile your account.

Setting up automatic account transfers is the easiest way to build your savings for your emergencies or large purchases.

ʺPay yourself firstʺ means you should assign a portion of your income to saving and investing every month.

Cash flow plan that assigns an expense to every dollar of income. Total income minus the total expenses equals zero.