Personal Finance Ch 3

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Occurs when money is withdrawn from a bank account and the available balance goes below zero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


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