Money Management Final Review

What is the primary purpose of a budget?

• To track spending habits

• To prevent spending money

• To earn interest

• To pay taxes

Which of the following is a fixed expense?

• Groceries

• Rent

• Entertainment

• Clothing

An emergency fund is typically used for:

• Buying a new car

• Paying for unexpected expenses

• Investing in stocks

• Taking a vacation

What percentage of income is commonly recommended for savings?

• 5%

• 10%

• 25%

• 50%

Which of the following is an example of a discretionary expense?

• Utility bills

• Dining out

• Rent

• Insurance premiums

A budget surplus occurs when:

• Expenses are greater than income

• Income equals expenses

• Income is greater than expenses

• Savings are not included in the budget

The '50/30/20 rule' recommends:

• 50% savings, 30% needs, 20% wants

• 50% needs, 30% wants, 20% savings

• 50% wants, 30% savings, 20% needs

• 50% debt repayment, 30% needs, 20% wants

What is a good reason to track your spending?

• To impress others

• To see where your money is going

• To avoid saving too much

• To eliminate fixed expenses

A short-term financial goal might include:

• Saving for retirement

• Paying off a mortgage

• Buying a concert ticket

• Establishing a 529 college fund

Which tool can help you automate your savings?

• A mobile app

• A budgeting spreadsheet

• Direct deposit

• A credit card