Quiz about Personal Financial Literacy: Budgeting Test

Question 1

The 50/30/20 rule describes how much a person should be budgeting for their needs, wants, and savings.

Which of the following expenses is a need according to the 50/30/20 rule?

Accepted Answer

rent or mortgage

Answer

gym membership

Answer

travel fund

Answer

cable TV subscription

Question 2

What should 30% of your income go towards, if you are following the 50/30/20 rule?

Accepted Answer

Wants

Answer

Needs

Answer

Investments

Answer

Savings

Question 3

According to the 50/30/20 rule, what percentage of your income should you allocate to

savings?

Accepted Answer

20%

Answer

10%

Answer

30%

Answer

50%

Question 4

The 50/30/20 rule describes how much a person should be budgeting for their needs, wants, and savings.

Which of the following expenses is a savings according to the 50/30/20 rule?

Accepted Answer

Retirement account contributions

Answer

Dining out expenses

Answer

Utility payments

Answer

Grocery bills

Question 5

Why should you pay attention to the per unit pricing when grocery shopping?

Accepted Answer

To ensure you get the best value for your money.

Answer

To find the most expensive items.

Answer

To ignore sales and discounts.

Answer

To focus only on brand names.

Question 6

The 50/30/20 rule describes how much a person should be budgeting for their needs, wants, and savings.

Which of the following expenses is a want according to the 50/30/20 rule?

Accepted Answer

cable TV subscription

Answer

health insurance premium

Answer

car loan payment

Answer

internet service

Question 7

The 50/30/20 rule describes how much a person should be budgeting for their needs, wants, and savings.

Which of the following expenses is a want according to the 50/30/20 rule?

Accepted Answer

dining out or ordering takeout

Answer

car insurance or maintenance

Answer

groceries or household items

Answer

savings or investments

Question 8

When saving money, it is important to pay attention to both planned, and unplanned expenses.

Which of these is a planned expense?

Accepted Answer

electric bill

Answer

car breakdown

Answer

emergency vet visit

Answer

car accident

Question 9

Ricky is working on his emergency fund. He is writing down all his monthly living expenses and is totaling them up.

However, Ricky has made a mistake and listed an expense that should not be listed.

Which expense should not be considered when making an emergency fund?

Accepted Answer

Entertainment

Answer

Utilities

Answer

Rent

Answer

Groceries

Question 10

How much should you save in your emergency fund savings, according to most financial experts?

Accepted Answer

Three to six months' worth of living expenses

Answer

One month's worth of living expenses

Answer

Twelve months' worth of living expenses

Answer

A fixed amount of $5,000

Question 11

Which expense should not be considered when making an emergency fund?

Accepted Answer

Hair salon

Answer

Rent

Answer

Utilities

Answer

Insurance

Question 12

What does "paying yourself first" mean in personal finance?

Accepted Answer

It means to prioritize saving and investing a portion of your income before other expenses.

Answer

It refers to taking out loans before making any payments.

Answer

It suggests investing only in high-risk stocks without saving.

Answer

It means to spend all your income before saving.

Question 13

You are currently getting paid every 1st and 15th of the month. You want to start paying yourself first and have opened a savings account. You want your savings transfers to happen every time you get paid.

Which transfer option best matches your pay?

Accepted Answer

semi-monthly

Answer

Once a month, starting on the day of your paycheck

Answer

Transfer funds weekly on Fridays.

Answer

Make a single transfer at the end of the month.

Question 14

There are two boxes of trash bags for sale at the grocery store.

Which box of trash bags is the better deal?

Accepted Answer

Box A

Answer

Box B

Question 15

Jadyn is working on her emergency fund. She is writing down all her monthly living expenses and adding them together.

However, Jadyn has made a mistake and listed an expense that should not be listed.

Which expense should not be considered when making an emergency fund?

Accepted Answer

Dining out

Answer

Groceries

Answer

Utilities

Answer

Insurance

Question 16

You are currently getting paid bi-weekly. You want to start paying yourself first and have opened a savings account. You want your savings transfers to happen every time you get paid.

Which transfer option best matches your pay?

Accepted Answer

Set up a transfer every other week.

Answer

Transfer a fixed amount every year to your savings account.

Answer

Set up a weekly transfer to your savings account.

Answer

Set up a monthly transfer to your savings account.

Question 17

Which of these costs would be the MOST difficult to adjust if you were looking to reduce your expenses?

Accepted Answer

Loan payment on a new car

Answer

Dining out at local restaurants

Answer

Expenses for new clothes

Answer

Postponing a purchase for a big-screen TV

Question 18

You earn a salary of $40,000 per year and decide to save 20% of your gross pay. You set a goal of creating a $16,000 emergency fund. How long will it take for you to achieve your goal?

Accepted Answer

2 years

Answer

6 months

Answer

1 year

Answer

3 years

Question 19

Which of these boxes of cereal has the LOWEST unit price?

Accepted Answer

Cereal B, which costs $5.00 for a 32 oz. box

Answer

Cereal A, which costs $3.20 for a 16 oz. box

Answer

Cereal C, which costs $2.50 for a 10 oz. box

Answer

Cereal D, which costs $4.50 for an 8 oz box

Question 20

Which description is most accurate for a Zero-Based Budget?

Accepted Answer

You put every dollar of your net pay into a budget category each month

Answer

You spend your checking account balance down to $0 every month

Answer

You spend your saving account balance down to $0 every month

Answer

You pay every one of your debts down to $0 every month

Question 21

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

Accepted Answer

Electricity bill

Answer

Rent

Answer

Car insurance premium

Answer

Student loan payment

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