Chapter 5: Budgeting and Expense Management Quiz

1 point(s)

Which of the following budgeting methods involves allocating cash into physical envelopes for specific categories?

50/30/20 Budget

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Envelope Budgeting

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Zero-Based Budget

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No-Budget Budget

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1 point(s)

In the 50/30/20 budget rule, what percentage of income should be allocated to savings or debt paydown?

30%

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20%

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50%

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10%

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1 point(s)

What is the primary purpose of an emergency fund?

To cover unexpected expenses

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To invest in stocks

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To purchase luxury items

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To pay for vacations

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1 point(s)

A zero-based budget ensures that every dollar earned is assigned a specific purpose.

True

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False

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1 point(s)

Discretionary expenses are costs required for basic living and functioning in daily life.

True

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False

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3 point(s)

Definition

Sort elements

Allocate 50% for needs, 30% for wants, 20% for savings or debt
Allocate cash into physical envelopes for specific categories
Every dollar earned is assigned a specific purpose

50-30-20 Budget

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Envelope Budgeting

Correct Incorrect Correct answer

Zero-Based Budget

Correct Incorrect Correct answer

3 point(s)

Definition

Sort elements

Recurring costs such as rent or mortgage
Costs that fluctuate like groceries and utilities
Costs that occur occasionally like annual insurance premiums

Fixed Expenses

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Variable Expenses

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Irregular Expenses

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1 point(s)

Arrange these budgeting steps in the correct order: Track income, List expenses, Allocate funds, Review and adjust. (put the first step at the top)

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1 point(s)

Rank the following expenses from most essential to least essential: Housing, Entertainment, Groceries, Transportation. (put the most essential at the top)

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1 point(s)

How can regularly reviewing and adjusting your budget help in achieving your financial goals?

This response will be reviewed and graded after submission.

Chapter 5: Budgeting and Expense Management Quiz