Personal Finance Quiz #2

What do personal budgets help people do?

• manage their incomes

• avoid having to pay taxes

• find goods they want to purchase

• balance their time at home and work

What does creating and following a personal budget help people do?

• get a lower tax rate

• earn government benefits

• earn more money at work

• save money for emergencies

Use the info to answer the question.

Once consumer organization distributes a form to help families plan their monthly budgets. Under the title for each expense category, such as "Housing" is the reminder that these budget items are, "Expenses that you can budget for, so you have money saved to pay for unplanned or annual bills"

What is the reminder telling families about unplanned expenses?

• They should pay their regular expenses before they pay any unexpected ones.

• They should set aside a certain amount for unexpected expenses in their budgets

• They will have money for unexpected expenses if they plan according to these categories

• They must lower their regular monthly expenses when they have unexpected expenses

The Samuels family often faces unexpected expenses, such as when one of their dogs gets sick. This year, they received a $5,000 income tax refund.

Which option below represents a wise compromise between giving themselves a treat preparing for unexpected expenses?

• save what they think their unexpected expenses will cost and spend the rest

• spend the $5,000 on a vacation and promise to save more when they get home

• spend $1,000 on things they want and save the rest for unexpected expenses

• save the entire amount for unexpected expenses and begin saving for a vacation

Why would a person deposit their money in a savings account instead of a checking account?

• they want to earn the most money they can on the deposit

• they want to use the money to pay monthly bills and expenses

• they want to make sure the bank has enough cash to cover their deposit

• they want to make sure they pay the lowest possible tax rate on the deposit

Which of the following is a major drawback of buying an item with a credit card rather than with cash?

• the payment will hurt the cardholders credit score

• the charge will result in additional taxes

• the payments must be made in monthly installments

• the charge may result in interest payments

Abe, a 35 year old teacher, is saving money for five things:

1. Retirement

2. 2.A bowling ball

3. 3. A family camping trip in the summer

4. 4. His 7 year old sons college tuition

5. 5. His 15 year old daughters college tuition

Which itemS from the list represent long term savings goals for Abe?

• 2 and 3

• 1 and 4

• 3 only

• 5 only

What is a benefit of saving money in a bank?

• Money in savings accounts earns interest

• Money in savings accounts cannot be taxed

• People with savings accounts have access to unlimited credit

• People with savings accounts have access to unlimited loans

Which of the following is an advantage a family gets from setting aside money for unplanned expenses as part of their budget?

• it forces them to pay less for essentials, such as food and housing

• it provides extra money if they decide to take an unplanned vacation

• it prevents them from going into debt to pay for unplanned expenses

• it prevents them from bankruptcy over a car repair or visit to the vet

I want to buy a house what is the BEST way to pay for it?

• currency

• coins

• credit card

• loan