Dave Ramsey Quiz Three

Abuse

A budget has been used to _____ them. They're constantly hearing, "It's not in the budget!" The purpose of a budget is to not spend more than you make. It is not intended to take all the fun out of your life.

Zero-based budget

A cash flow plan that assigns an expense to every dollar of your income, wherein the total income minus the total expenses equals zero.

Carbon check

A copy of each check you write.

Cash flow statement

A summary that shows total income and spending for a given time period.

Budget

A written cash flow plan.

Crisis

A written plan removes the "management by _____" from your finances. Seventy percent of Americans are living paycheck to paycheck, just one missed payday away from disaster.

Money fights

A written plan, if actually lived and agreed on, will remove many of the _____ _____ in a relationship.

Guilt/shame/fear

A written plan, if actually lived and agreed on, will remove much of the _____, _____ and _____ that may be part of buying necessities such as food or clothing.

Overspending

A written plan, if actually lived and agreed on, will show if you are _____ in a certain area.

Overdrafts/stress

A written plan, it actually lived and agreed on, will remove many of the _____ from your life, consequently removing a lot of _____.

Plan/before

All we want you to do is _____ how you're going to spend that money _____ you actually spend it. That's all a budget is!

Impulse purchase

An item that is bought without previous planning or consideration of the long-term effects.

Dollars

But it goes further than that. If you parents buy you clothes or give you money to go out with your friends, pay for club or athletic fees, or put gas in your car, all of those things represent _____ that are flowing right through your fingers.

Online bill pay

Describe the various payment options that come with a checking account

B.) Make overspending more likely

Doing a budget does not: A.) Make your money go further B.) Make overspending more likely C.) Show if you are overspending in an area D.) Remove guilt and shame sometimes associated with purchases

Because managed money goes further (helps plan, meet goals, less stress)

Explain why you should always have a cash flow plan.

Debit

If not managed and made to behave, the _____ card is certain to become a budget buster.

Job/work

If you have a part-time _____ after school or even if your parents give you a commission for doing _____ around the house, you've got some money.

Manage

If your folks go along with this, then you'll have a pile of money to _____ every month.

Zero

Income minus outgo equals exactly _____. This way you are able to put every dollar to work for you.

Bank

Instead of having your parents pay for stuff, ask if they'll figure out how much money they'd end up giving you for the month and then put it in your _____ account. From there, it will be up to you to budget that money.

Straightjacket

It has a _____ connotation. They believe that having a budget will constrict them and keep them from doing what they want to do. The reality is, managed money goes further and actually gives you more freedom.

Active

Money is _____. It is moving all the time. So if you don't make your money behave, you'll always wonder where it went.

Overdraft

Occurs when money is withdrawn from a bank account and the available balance goes below zero.

Fear

Paralysis from _____ of what they will find. Some people are afraid to look at their finances closely. It's better to face those bills or debts and begin to proactively fix the situation. Ignoring financial distress only allows the problem to get bigger.

Envelope system

Series of envelopes that are divided into categories (food, entertainment, gas, etc.) and are used to store cash for planned monthly expenses.

Envelope system

The _____ _____ works great for managing spending on things that don't normally have a fixed monthly expense, like eating out. Decide how much you have to spend on each specific category and place that amount in an envelope. When the envelope for a specific area of spending - like clothing or entertainment - is empty, you are done spending in that area for the month.

Reconcile

The act of matching your bank statements with your checkbook.

True

The envelope system works great for managing spending on things that don't normally have a fixed monthly expense.

True

The number-one cause of divorce in North America today is stress and disagreements over money.

Before

The zero-based budget gives every dollar a name on paper, on purpose, _____ the month begins. This is the best method of budgeting since it ensures that every dollar you make is assigned a specific purpose. Money that is not directed toward a goal or included in a plan is typically wasted.

Worked

They've never had a budget that _____. Don't expect to write a perfect budget on your first try. You will make mistakes. With some practice, however, writing a monthly budget will become easier.

Money

Think you don't have money to budget? You've got some _____, you just need to think a little differently.

Duplicate

Use _____, or carbon checks, if necessary to keep up with your check register. Just looking at your online statement every few days to see how much money is in the account is not enough. Your online statement may not reflect unprocessed checks or debit purchases.

Student/excuses

We've developed a _____ budget form just for you. So no more _____! Starting this month, you will do a written budget every month for the rest of your life.

You might leave things out, do not write it down, do not follow it or it's too complicated of a plan.

What are the reasons cash flow plans sometimes do not work?

D.) All of the above

Which of the following is a consequence of overdrawing your checking account? A.) Overdraft fee from your bank B.) Bounced check fee from the store C.) Stress from money mismanagement D.) All of the above

Backup

Why is it important to maintain a file of both paper and electronic financial records.

So that every dollar is planned for and put in categories.

Why is the zero-based budget the best method of budgeting?

Leave/out

You _____ things _____. Make sure your budget includes everything that requires money. You may forget and leave some things out at first, but as you get better at budgeting, that will happen less frequently.

Overcomplicate

You _____ your plan. All you really need is paper, a pen and a calculator. It's as simple as writing down everything that requires money each month and putting an amount next to it.

Do it

You don't actually _____ _____. This may sound overly simple, but it's easy to find reasons not to write a budget. When this happens, remind yourself of all the reasons you should do it.

Live

You don't actually _____ on it. Your written plan will not work unless you actually follow it. And as you get used to it, you may see some budget items that aren't realistic. That's okay! Just adjust the budget for next month until you get it right.

Cash flow/month

You must do a written _____ _____ plan every _____. A budget is your blueprint for building wealth. You've got to have a game plan!

Balanced

You must keep your checking account _____. Keeping an accurate balance of your checking account will help you avoid the most frequent and costly mistake, the overdraft. Each occurrence can cost an average of $35 for the bounced check fee at your bank, plus possible store charges.

D.) All of the above

Your month budget should include: A.) Fixed expenses B.) Variable expenses C.) Discretionary expenses D.) All of the above

Overdrafts/money

_____ are a sign of crisis living and sloppy, lazy _____ habits. Remember, managing your money is your responsibility. Managing money well is a sign of maturity.

Managed

_____ money goes further. That's because when you write up a budget, you're accounting for every single dollar of your income. You cut out all of those little expenses that fly into your wallet like moths and eat away at your money.