Personal Finance Ch 3
Percentage of Americans living paycheck to paycheck
70
Which of the following statements is false
A budget is meant to summarize the saving and spending that has taken place over the past year
Which of the following account records would have the most current balance
Account balance statement from the ATM
A written budget, if followed, removes __________from your finances
All of the above
Which of the following is a consequence of overdrawing your checking account?
All of the above
Your monthly budget should include
All of the above
A written cash flow plan
Budget
A summary of all the income and outgo over a certain time period
Cash flow statement
Your own record of all your transactions
Check Register
Which of the following is not a record-keeping feature you could expect from your bank
Customer service reconciles your account for you
Series of envelopes that are divided into categories and are used to store cash for planned monthly expenses
Envelope system
T or F: A debit card cannot be used for online purchases
False
T or F: Having more than one bank account is never a good idea since it can complicate money management
False
T or F: If you write a zero-based budget every month, it is not necessary to reconcile your account
False
Expenses that remain the same from month to month
Fixed
Rent is a
Fixed expense
An item that is bought without previous planning or consideration of the long-term effects
Impulse purchase
Car repairs are a
Intermittent expense
The following are guidelines for budgeting with an irregular income except
Make a list of all of your expenses for the month ahead
Occurs when money is withdrawn from a bank account and the available balance goes below zero
Overdraft
To match your bank statement with your checkbook
Reconcile
Doing a budget does not
Remove guilt and shame sometimes associated with a purchase
Which of the following is something that a typical millionaire would do?
Spend less money than he or she makes
The zero-based budget is the best method of budgeting because
The zero-based budget ensures that every dollar you make is assigned a specific purpose
T or F: #1 reason for divorce is stress and disagreement over money
True
T or F: Budgeting is crucial to your financial success
True
T or F: Online bill pay allows you to make payments to whomever you wish without having to write a check and send it in the mail
True
T or F: Setting up automatic account transfers is the easiest way to build your savings for your emergency fund or large purchases
True
T or F: The envelope system works great for managing spending on things that donʹt normally have a fixed monthly expense
True
T or F: Writing and following a zero-based budget will help you avoid overspending and impulse purchases
True
T or F: ʺPay yourself firstʺ means you should assign a portion of your income to saving and investing every month
True
Eating out is a
Variable expense
Groceries are a
Variable expense
A cash flow plan that assigns an expense to every dollar of your income, wherein the total income minus the total expenses equals zero
Zero-based budget
