Examination — The First Budget: Where the Money Goes

1.A paycheck shows gross pay of $3,400 and total deductions of $780. What is the net pay a budget may spend, in dollars?

2.Which of these is a fixed expense?

3.Which expense is most clearly a want?

4.A month lists as fixed: rent $980, insurance $140, and a subscription $25. What is the total of the fixed expenses, in dollars?

5.In one sentence, explain why a tracked month of spending is a better basis for a budget than what you remember spending.

6.Which statement best describes a budget?

7.Take-home pay is $2,600. Under the 50/30/20 frame, how many dollars are allowed for needs?

8.Take-home pay is $2,600. Under 50/30/20, how many dollars go to saving and debt payoff?

9.A friend's budget has 30 fine-grained categories and they abandoned it after two weeks. What is the best fix?

10.Take-home pay is $2,200. You have assigned $2,050 across your categories. In a zero-based plan, how many dollars still need a job?

11.You want to raise your saving line by $70 while keeping the budget reconciled. What must you do?

12.Your essential spending is $1,700 a month. How many dollars is a three-month emergency fund?

13.Why is the emergency fund built before higher-return saving goals?

14.You want $1,800 for a goal in 9 months. How many dollars must you save each month?

15.What distinguishes compound interest from simple interest?

16.Using the rule of 72, about how many years does money take to double at an 8 percent rate?

17.A $1,500 balance earns 10 percent compounded yearly. What is the balance after one year, in dollars?

18.You borrow $800 and repay a total of $950. What did the loan cost, in dollars?

19.Two loans for the same amount have the same APR, but one runs 24 months and the other 48. What is true?

20.A $1,500 card balance charges 2 percent interest a month, so $30 in interest. If your minimum payment is $40, how many dollars actually reduce the balance this month?

21.Which is the clearest sign of a debt trap?

22.On day 7 of a 28-day month you have spent $170 of a $200 eating-out plan. What does the pace tell you?

23.Your budget totals $2,000. You raise groceries by $45 and lower fun by $45 to cover an overrun. What is the new total, in dollars?

24.A category has run over its limit for five months straight. What is the right response?

25.A $720 annual bill is due in 12 months. How many dollars should the sinking fund set aside each month?

26.Match each cost to the fund that should cover it.

27.Without looking back: name the whole arc of a first budget, from the figure it starts with to the habit that keeps it alive.