Chapter 4 Budgeting and Planning (Financial Literacy) Part 1

What should you do if your budget does not balance?

Adjust savings, lower expenses, increase income. They all work.

A personal net worth statement shows a person's cash inflows and cash outflows for a period of time.

False

Financial goal should be set before personnel goals, because your personal goals will be dependent on them.

False

If you spend less money on an item than you planned spend, this is an unfavorable varisnceinyour budget analysis.

False

Saving should be included in your list of cash inflows when creating the personal cash flow statement.

False

Savings should be added to income when balancing the budget.

False

You wealth can remeasured using the personal cash flow statement.

False

Although people's financial resources are limited, their wants and needs are unlimited and growing.

True

Because most people do not have enough resources to meet all their needs and wants, they must make choices.

True

The amount owed on your credit card is an example a liability.

True

With every buying decision, there is a tradeoff and an opportunity cost.

True

A utility bill is an example of?

a variable expense

Your net worth can be computed as ?

assets minus liabilities

Standards against which progress is measured in reaching goals are called?

benchmarks

The amount of money a person has to spend after needs are met is called?

discretionary income

Which of the following is a common internet scam in which an e-mail is sent from someone posing as your bank or other legitimate business asking for personal information?

phishing

Which of the following would be considered a fixed expense?

rent

What is the missing amounting the budget? Income work $400 Allowance 100 Interest 10 Total income $510 Savings deposit to college fund $250 Expenses Clothes/ shoes $100 Lunches 60 Entertainment/miscellaneous ? Total expenses $260 Total savings and expenses $510

$100

Which of the following would not be included in a person's listing of assets?

$13,000 car loan

Sherry Mather's has 31,565 in total assets and owes 13,565 on her car loan and credit cards. What is Sherry's net worth?

$18,000

During May, Andy had cash inflows of $550, $40, $65, and $80. He had cash outflows of $10, $30, $60, $25, $100, and $250. What is andy's net cash flow?

$260

If Pat earns $120 each paycheck and receives four paychecks per month, how much should she include as earnings in her yearly budget?

$5,760

If Alicia budgets $30 per week for lunches but spends $39, what is the variance percentage?

-30%