Question 1

You just moved to a new city and are researching different transportation options. You should consider the following factors EXCEPT…

Accepted Answer

Decor and style

Answer

Distance and commute time

Answer

Convenience and budget

Answer

Reliability and time schedules

Question 2

Gaby lives one hour away from work and wants to make the most of her commute time to work on her business plan for her side hustle. Which mode of transportation makes the most sense for her while also saving on commute costs?

Accepted Answer

Taking the train

Answer

Taking an Uber

Answer

Driving her car

Answer

Biking to work

Question 3

Which analogy about leasing or financing a vehicle is correct?

Accepted Answer

Leasing a car is like renting the car

Answer

Financing a car is like selling the car

Answer

Leasing a car is like owning the car

Answer

Financing a car is like renting the car

Question 4

Why are monthly payments with leasing a car lower than monthly payments with financing a car?

Accepted Answer

You are only paying for the value you use while driving the car

Answer

The gas for a financed car is more expensive than gas for a leased car

Answer

Leased cars are typically older models, so they are cheaper

Answer

You do not need to pay for insurance for a leased car

Question 5

What is one disadvantage of leasing a car compared to financing a car?

Accepted Answer

You have a certain mileage limit on the car

Answer

You can only lease used cars

Answer

You have higher monthly payments

Answer

You won't be able to drive it farther than a 10 mile radius from your house

Question 6

Which of the following statements about vehicle depreciation is FALSE?

Accepted Answer

You can avoid depreciation by getting the most expensive insurance plan

Answer

A new car typically loses about 10% to 15% of its value by the time you drive off from the dealership

Answer

Vehicle depreciation is defined as the reduction in value of the car as time passes

Answer

The biggest depreciation happens within the first few years of new car ownership

Question 7

What is the most accurate comparison of pros and cons between purchasing a new car versus a used car?

Accepted Answer

Used cars can be bought at a lower price, but often require more maintenance costs than new cars.

Answer

New cars don't have damage from a previous owner, but only used cars typically come with a warranty.

Answer

New cars can be bought at a lower price, but often require more maintenance costs than used cars.

Answer

Used cars can be bought at a lower price, but will depreciate faster than new cars.

Question 8

When selecting your car payment plan, the _____ your loan term is, the lower your monthly bill will be. However, your overall interest will be ______.

Accepted Answer

longer; higher

Answer

longer; lower

Answer

shorter; lower

Answer

shorter; higher

Question 9

What is the BEST option that you can try to cut down on commuting costs?

Accepted Answer

Join a rideshare or carpool

Answer

Purchase a new car

Answer

Only go to work once a week

Answer

Take the longest route to work

Question 10

Which of the following costs would increase if you had a longer commute to work or school?

Accepted Answer

Fuel and maintenance

Answer

Vehicle registration fees

Answer

Car payments

Answer

Parking fees

Question 11

For most American households, the largest expenses in their budget will likely be...

Accepted Answer

Food, Housing, Transportation

Answer

Clothes, Entertainment, Food

Answer

Clothes, Food, Housing

Answer

Food, Insurance, Transportation

Question 12

Complete this sentence: If your employee compensation is structured as a salary, ...

Accepted Answer

You have agreed to work for a predetermined amount of money

Answer

You will earn more for each additional hour you work

Answer

You will always out-earn someone who is paid a wage instead

Answer

You will not have taxes removed from each paycheck

Question 13

Which formula best represents the math used to determine your net pay?

Accepted Answer

Gross pay -- taxes -- other deductions

Answer

Total hours worked x wage

Answer

Gross pay -- salary

Answer

Gross pay -- taxes

Question 14

At your part-time job, you receive net pay of $400 per month. Each month you automatically save $100, and then you budget $50 for your cell phone, $50 for lunch at school, and $150 for fun with your friends. What is the end result of your budget?

Accepted Answer

A surplus of $50

Answer

A surplus of $750

Answer

A deficit of $750

Answer

A deficit of $50

Question 15

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

Accepted Answer

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

Answer

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

Answer

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

Answer

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

Question 16

Which piece of advice around saving and budgeting is BEST?

Accepted Answer

Budget for your savings first each month, and then design the rest of your plan around the remaining money

Answer

Follow your budget each month, and if you end up with a surplus, that money goes into savings

Answer

Use a budget each month, but do your saving one time per year

Answer

If you have a budget, you don't need to save

Question 17

Why is a budget designed without any category for "fun" or "entertainment" likely to fail?

Accepted Answer

You'll likely spend at least a little on these things anyway, and then you'll be left with a deficit in other categories

Answer

Your app or spreadsheet will come preloaded with those categories, so you cannot skip them

Answer

These categories are tax deductible, so you'll be losing money if you don't spend on them

Answer

These categories allow you to "pay yourself first," so they're the most important

Question 18

Month after month, Zuma just cannot get his budget to balance, and he is overspending by a huge amount. Which action would make the MOST impact on his budgeting success?

Accepted Answer

When his lease is up, move into his grandmother's basement so he can cut out his rent payments

Answer

Start clipping coupons to use at the grocery store

Answer

Focus on building up an emergency fund to use in the future

Answer

Stop paying his student loans and credit card bills until he can figure things out

Question 19

Isaiah works for the summer at a technology company and has a salary for the summer of $3000. After federal and state taxes and Social Security/Medicare taxes are deducted, his take-home pay is $2500. Which of the statements below is correct?

Accepted Answer

His gross pay is $3000, and his net pay is $2500

Answer

His gross pay is $2500, and his net pay is $3000

Answer

His gross and net pay are $3000

Answer

His gross and net pay are $2500

Question 20

All of Mei's friends use a popular budgeting app that costs $4 per month, but she is trying to save money, not spend it. What MIGHT be a good reason for her to consider the app?

Accepted Answer

Budgeting apps have convenient features like auto-tracking expenses or alerts for overspending

Answer

The format of a budget is the number 1 predictor of how successful it will be

Answer

Spreadsheet or paper budgets never work as well

Answer

Lots of people use it, so she should do it too

Question 21

The most common time frame individuals use when developing a budget is __________.

Accepted Answer

Monthly

Answer

Daily

Answer

Yearly

Answer

Weekly

Question 22

Which formula represents the math used to create a basic budget?

Accepted Answer

(Sum of all income) -- (Sum of all expenses)

Answer

Gross income -- Net income

Answer

Surplus -- Deficit

Answer

(Income + Taxes + Insurance) -- Expenses

Question 23

Why is it important to create a budget as a teenager?

Accepted Answer

A budget will help you save money and prioritize your spending

Answer

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

Answer

A budget makes filing your taxes faster and simpler

Answer

A budget is required to qualify for financial aid for college

Question 24

If you have a budget deficit and are trying to distinguish between needs and wants in your budget, which question is MOST helpful?

Accepted Answer

Will there be a bad consequence if I don't buy this item?

Answer

Will this item last more than one year?

Answer

Does this item make me happy?

Answer

Do all of my friends have this item?

Question 25

In which scenario below would an unlimited data plan on your smartphone be best classified as a NEED?

Accepted Answer

If you don't have wifi at home and it allows you to complete homework assignments

Answer

If it allows you to check email and get updates on Twitter during class

Answer

If it keeps you entertained by allowing you to stream videos anywhere

Answer

If it gives you the ability to use a mobile wallet instead of a debit or credit card

Question 26

When creating a budget, which list below portrays expense categories in the most responsible order?

Accepted Answer

All of your needs, savings, high priority wants, low priority wants

Answer

Savings, high priority wants, low priority wants, all of your needs

Answer

All of your needs, high priority wants, low priority wants, savings

Answer

All of your needs, high priority wants, savings, low priority wants

Question 27

Which item below would MOST PEOPLE consider a need and why?

Accepted Answer

Auto insurance, to minimize your financial risk if you cause a major accident

Answer

A week's vacation, to decompress from the stresses of work or school

Answer

Professional SAT prep tutoring, to guarantee a high score and college admissions

Answer

A new laptop every 2 years, so you can work quickly and efficiently

Question 28

Which statistic is a good metric for whether a college's graduates go on to be financially successful?

Accepted Answer

Graduates' student-loan repayment rate

Answer

Percent of students eligible for Perkins Loans

Answer

Sticker price of the college's tuition

Answer

Size of the college's endowment

Question 29

How can the college you choose to attend impact your future adult budget?

Accepted Answer

Any student loans you owe will become a necessary expense in your budget

Answer

Students who attend more expensive colleges earn more income once they start working

Answer

Your scholarship money will impact your taxes for years to come

Answer

The budget you create during freshman year will be the same budget you use until age 30

Question 30

How are savings and budgeting related?

Accepted Answer

A good budget will help control your spending and enable higher saving

Answer

The more money you save, the higher amount of income you will have available to spend

Answer

Once you save enough money, you will no longer need to budget

Answer

Saving is the final amount of money you have leftover in any monthly budget

Question 31

How can completing a budget be beneficial to your health?

Accepted Answer

A budget reduces the mental and emotional stress of never knowing if you'll have enough to cover expenses

Answer

A budget increases your income, letting you spend more on healthy foods, gym memberships, etc.

Answer

A budget increases your heart rate, cholesterol, and other health metrics

Question 32

Which of these typically represents a fixed cost in a monthly budget?

Accepted Answer

Rent or mortgage

Answer

Groceries

Answer

Dining out

Answer

Car maintenance

Question 33

Net wealth is best defined as...

Accepted Answer

The total of all of your assets minus the total of all of your debts

Answer

The value of your home, car, and investments

Answer

Reaching the top 10% of all households in the US

Answer

Your monthly income minus your monthly expenses

Question 34

If you are following a 50/30/20 Budget, what two items fall into the 20 category?

Accepted Answer

Saving & debt repayment

Answer

Fixed & variable costs

Answer

Income & expenses

Answer

Wants & needs

Question 35

Why is Zero-Based Budgeting called Zero-Based Budgeting?

Accepted Answer

Your budget's income and expenses total to exactly $0, so every dollar is accounted for

Answer

It requires 0 knowledge of budgeting skills to achieve this type of budget

Answer

It's the best budget to use if you currently have $0 in your savings account

Answer

Your checking account balance goes to $0 every month

Question 36

Malachi is a 25-year-old man who lives with a roommate in Kansas City. He is going to start using the Cash Envelope method of budgeting. Why is it unnecessary for him to create an envelope called "Car Payment"?

Accepted Answer

His car payment should be fixed every month, so he doesn't need to monitor spending in this category

Answer

He should not be spending any money on a car, so he should stop making those payments immediately

Answer

His car payment is far too large to take out that amount of cash from the ATM

Answer

A car payment is an expense he would likely split with his roommate, so it isn't suitable for Cash Envelope Budgeting

Question 37

What does it mean to "pay yourself first?"

Accepted Answer

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

Answer

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

Answer

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

Answer

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

Question 38

Natalia is trying to budget her $4000 take-home pay using a 50/30/20 Budget. How much does she have available to pay for her "needs"?

Accepted Answer

$2000

Answer

$50

Answer

$1200

Answer

$800

Question 39

Erik is using Zero-Based Budgeting, and every month he has net pay of $500 from his part-time job. As he does his budgeting for next month, he estimates he will need $450 of that to meet his expenses. What should he do with the remaining $50?

Accepted Answer

Budget it into his savings account for use at a later time

Answer

Spend it on something random, because it's not OK to have leftovers in a Zero-Based Budget

Answer

Pretend it doesn't exist

Answer

Deposit it into his checking account and save it for college

Question 40

Which style of budget is best suited for someone who chronically overspends on their wants by charging expenses on their credit card?

Accepted Answer

Cash Envelope

Answer

Zero-Based

Answer

Wealth Management

Answer

50/30/20

Related quizzes

Related quizzes