Unit 1 Lesson 3 Content Quiz

What is the main purpose of a budget?

• To spend as much money as possible

• To keep track of friends

• To manage money and avoid overspending

• To compare with others’ spending

According to the 50/30/20 rule, what percentage of income should go toward needs?

• 30%

• 50%

• 20%

• 70%

Which of the following is an example of a “want”?

• Rent

• Groceries

• Streaming services

• Utilities

If someone earns $2,000 a month, how much should they save following the 50/30/20 rule?

• $200

• $400

• $600

• $1,000

When your expenses are higher than your income, your budget balance is:

• Positive

• Negative

• Zero

• Extra

Which of the following is an example of a need?

• New shoes for fun

• Vacation trip

• Rent payment

• Movie tickets

What happens if your budget balance is zero or positive?

• You are overspending

• You are living within your means

• You have debt

• You must cut more spending

The first step in creating a budget is to:

• Subtract expenses from savings

• Write down wants

• Know your income

• Borrow money

What is a fixed expense?

• An expense that changes every month

• An optional purchase

• An expense that stays the same each month

• An unexpected cost

Which of the following is a variable expense?

• Car payment

• Rent

• Groceries

• Insurance