Have an account?
Skip to Content
Build your own quiz
6 questions
Show Answers
See Preview
- 1. Multiple Choice
Once you start making money, how do you make sure that you reach your financial goals? Maybe you need money for a big trip or are saving up for college. Whatever your goal, you're going to need a budget. Budgets help people track their spending and hit their financial goals. A budget lists your income-money coming in from wages, gifts, things you sell, etc.-in one column. All of your expenses-the big and small things you spend money on-are listed in another column. Some budgets break down expenses into two columns: what you plan to spend and what you actually spend. If you are budgeting well and spending responsibly, these columns should be about the same. Usually budgets are organized by month so that in any given month, you can see how much money you made and how much you spent.
If you make a budget, ____________
You should never have to rely on savings or borrow money.
the amount you planned to spend in a month should be close to what you actually spend.
your total income and your total expenses should be the same number
your expenses should be much higher than your income.
- 2. Multiple Choice
There are two types of expenses: fixed expenses and variable expenses. Fixed expenses are the things that are the same every month month, such as rent, car insurance payments, phone bills and cable bills. Variable expenses are things that change, such as money spent at restaurants, on movies, clothing or video games, and any big, one-time purchases or expenses like a car or annual taxes. If you're trying to reduce your spending, it's usually easier to reduce variable expenses by adjusting your lifestyle by, for example, eating out less, but if you can reduce a fixed expense such a choosing a cheaper phone plan, it can make a big financial difference over time.
If Joe wants to reduce his monthly spending, he should ____
get a better job
reduce his fixed expenses
reduce his variable expenses
reduce his variable and fixed expenses
- 3. Multiple Choice
The easiest way to figure out which expenses you can cut is to think in terms of wants and needs. A need is something that it would be almost impossible to live without. Technically, you could live without a phone or a home, but it would be hard, so consider those things a need. Needs usually include rent, money spent on groceries, (some) clothes, tuition, transportation and phone bills. If you feel there is something you could live without, it's probably a want. These include things like movies, games, MMA lessons, going out to eat and much more. If your goal is to save money, cut down on your wants or do things like make your lunch at home instead of buying it every day. Get down to the bare necessities and watch your money pile up.
Which of the following is NOT a need?
Electricity
Transportation
Eating at a restaurant
Monthly rent
- 4. Multiple Choice
The most important rule of money management is this: make more than you spend. If you can, you'll have positive cash flow. Your income will be greater than your expenses, and you'll have money left over to save that you can rely on if you have unforeseen expenses. If you make exactly the same amount as you spend, you'll be breaking even. When people start a business, they usually calculate the amount of money they'll need to make to break even. They know they need to make at least that much. If your income isn't enough to cover all your expenses, you'll have negative cash flow. This can be OK for a short period of time if you have savings, but eventually, you're going to need to increase your income or reduce your expenses to avoid going into debt.
Successful money management means ____________
You make more than you spend.
You always break even.
You spend more money than you make.
Going into debt.
- 5. Multiple Choice
A consumer is someone who buys something. Smart consumers weigh the costs and benefits of everything they purchase and consider how important an item will be to their life. Will it give them health, happiness or opportunities to make more money? Do they really need that item, or do they simply want it? Before buying something, they gather information from various sources about how good the item is and how much it should cost. The internet has made gathering this information easier with sites like Amazon that allow consumers to rate items, and because it allows you to compare prices. Researching your purchases can be time-consuming, but it helps you make smart decisions and often saves you a lot of money. The same shirt can be three different prices on three different websites-don't pay more than you have to!
Which of the following is an example of smart consumer behavior?
Seeing an item in a store and buying it on impulse.
Looking up how much an item costs from different stores.
Buying an item without researching it first.
Purchasing an item you know you don't really need.
- 6. Multiple Choice
You might find yourself deciding between going to college or getting a full-time job. The full-time job would pay you $25K a year, and college would cost you $25K a year. But the cost of going to a four-year college isn't only the tuition and expenses required to attend. You also need to consider the opportunity cost. The opportunity cost is the value of the thing you choose not to do. If you factor in the opportunity cost of not working and having income, the total cost includes the money that you would lose by not working. However, the return on investment (ROI) of going to college is very high because you'll be able to get better paying jobs and will have more opportunities when you graduate, which means going to college instead of working full-time might be worth it in the long run.
Opportunity cost is ____________
the value of the thing you chose to do.
a cost that is impossible to calculate.
how much a good opportunity will require you to spend.
how much money you lose by choosing not to do something.
- Answer choicesTagsAnswer choicesTags