Unit 3- EPF test review

What does it mean to "pay yourself first?"

• Set aside some fun money in each month's budget so you can enjoy yourself

• Auto-deposit a set amount of money into savings after each paycheck so that you don't spend all your income

• Be self-employed, so that you don't have a boss and get to keep all income from your business for yourself

• Do all of your budgeting at the beginning of the month, rather than at the end

Which of the following situations is an example of net pay?

• Brian multiplies his hourly wage by his total hours worked

• Timothy multiplies his hourly wage by his total hours worked then subtracts taxes and deductions

• Helene multiplies her hourly wage by her total hours worked then subtracts taxes, deductions, and budgeted needs

Why is it important to create a budget?

• A budget is a necessary to qualify for loans and credit cards

• A budget makes filing your taxes faster and simpler

• A budget will help you save money and prioritize your spending

• A budget will guarantee you have enough money saved for college so you won't need loans

If you are following a 50/30/20 Budget, what  item falls into the 20 category?

• Wants

• Saving

• Fixed costs

• variable costs

Why is it important to budget using your net pay, rather than your gross pay?

• Your net pay will be higher, giving you more spending money each month

• Your net pay will account for all the taxes and deductions that are removed each paycheck

• Net pay is better for teenagers and young adults, whereas gross pay pertains to adult earners

• Your total tax bill will be lower if you budget using your net pay

If you are trying to substantially reduce the amount you spend on food, you should try...

• Drinking more coffee and soda so you are not as hungry for food

• Dining at restaurants more often so you don't waste water doing dishes

• Eating way more snacks on the go and way fewer meals at home

• Cooking your own food at home for as many meals as possible

For most Americans, which budget expense category is largest?

• Housing

• Food

• Transportation

• Clothes

You're considering moving into a 4-bedroom apartment with 3 roommates rather than living on your own post-college. Which of your expenses would likely DECREASE by having roommates?

• Renters insuance

• Cell phone bill

• Internet bill

• Student loan payment

How is gross pay different than net pay?

• Gross pay is for hourly workers, while net pay is for salaried employees

• Gross pay is always lower, while net pay is always higher

• Gross pay is the total you earned, while net pay has taxes deducted

• Gross pay is used for spending, while net pay is used for budgeting

Which one of these expenses most likely represents a VARIABLE cost in someone's budget?

• Electricity bill

• Rent

• Car insurance premium

• Student loan payment