Period 7 Personal Finance Test Chapter 7

1.

1 point

A budget is:

People telling their money what to do

A written financial goal

Being proactive with your money

All of the above

2.

1 point

A budget will not work if you:

Don’t like numbers

Like to shop

Leave things out

Don’t make a lot of money

3.

1 point

On average, how long will it take before your budget begins to work effectively?

One month

Two months

Three months

Six months

4.

1 point

Which statement best describes a zero-based budget?

Income minus outgo equals zero

A perfect month where you miss zero payments and save for your retirement

A budget that has zero debt payments

Both a and c

5.

1 point

A zero-based budget is only used for people that have zero debt.

True

False

6.

1 point

You should make a new budget every month.

True

False

7.

1 point

Unless an adult is listed on the account, you cannot open your own savings account until you are 18 years old.

True

False

8.

1 point

Why should you budget?

A budget will remove a lot of stress

A budget can show areas of overspending

A budget manages money

All of the above

9.

1 point

A zero-based budget means you have spent every dollar of income before the month begins.

True

False

10.

1 point

If you are married, which is true of budgets?

The spouse who is not good with numbers shouldn’t be involved in the budget.

The first few budgets will result in arguments, but these will decrease over time.

After the first few budgets, the novelty will wear off and arguments will gradually increase.

All of the above.

11.

1 point

The envelope system includes using credit cards for emergencies

True

False

12.

1 point

If you are struggling financially and are behind on your bills, what should you budget first?

Credit card payment

Food

Clothing

Gas for the car

13.

1 point

You should always reconcile your checking account to your bank statement within three weeks of receiving it.

True

False

14.

1 point

Which is a reason why people avoid making
a budget?

Fear of what they may find

A budget has been used to abuse them

They never had a budget that really worked

All of the above

15.

1 point

Which of the following is not true of a zero-based budget?

Use envelopes for categories in which you tend to overspend.

The money you spend should equal the money you earn.

If you have extra money left at the end of the month, your budget was successful.

You spend every dollar on paper before the month begins.

16.

1 point

Over time, a budget will most likely lead to more stress and money fights.

True

False

17.

1 point

The envelope system includes using credit cards for emergencies.

True

False

18.

1 point

What should you do if you overspend in one particular budget category?

Immediately sit down and adjust another category to make up for the difference.

Nothing—that’s the way it goes some months.

Whatever you overspend needs to go on a credit card.

Use your emergency fund and adjust your budget the next month.

19.

1 point

Which of the following could explain a different balance between your statement and account register?

Outstanding checks

Unrecorded deposits

Manual error

All of the above

20.

1 point

A written cash flow plan is done every:

Time your income changes

Six months

Month

Three months

21.

1 point

The allocated spending form:

Helps budget money by paycheck.

Helps plan for bills that occur annually.

Helps plan for categories you tend to overspend in.

All of the above

22.

1 point

It usually takes three months for your budget to begin working well.

True

False

23.

1 point

You should make a new budget every month.

True

False

24.

1 point

In order to effectively manage money, you need a:

Computer

Budget

lot of money

Online checking account

25.

1 point

Another name for a budget is a cash flow plan.

True

False