Pre and Post Test Budgeting Basics Answer Key

 Decide a maximum amount that you can spend each week. Spend that amount however you want as long as you don’t go over it. D Divide your income into categories and plan how much you’ll spend on each. 2. How does a debit card work? A B C D It lets you pay with the money in your checking account. Your bank or credit union lets you borrow money that you have to pay back later. It automatically deducts money from your savings account. It gives you the option to choose what account you want to pay with. 3. Which of the following is true about credit cards? A B C D You can’t use a credit card at most stores. If you don’t pay your balance off in full each month, you’ll accrue interest. Credit cards allow you to access money in your checking account. Charging your credit card is the best way to pay for an unexpected expense. 4. Someone broke into your apartment and stole all of your stuff. Luckily, you have renter’s insurance. How do you request that your insurance pay for the lost items?  A B C D File a claim. Write a deductible. Submit a powerpoint presentation. Prepare a lease. 5. What is the name of the document that comes with your paycheck and shows you what you were paid and how much was taken for taxes?  A B C D Paystub. Payline. Pay Report. Pay Sheet. 6. When moving to a new rental, you’ll likely need to pay a security deposit. How much is this often?  $500. A B 75% of one month’s rent. C First and last month’s rent. D Four months of rent. 7. You got $200 from your grandma for your birthday. What should you do first? A B C D Record it as income in your budget. Stick it under your bed for safekeeping. Deposit it all straight into your savings account. Spend it. 8. What is the name of the document that tells you what you need to pay on your credit card?  A B C D Overdraft. Lease. Deposit. Statement. 9. What happens if you go into debt?  A B C D You’ll need to pay back a minimum amount every month. You’ll likely pay more than you borrowed due to interest. Your net worth will be negatively affected. All of the above. 10. You charged $500 to your credit card to buy a new TV and paid it off after 6 months. With interest, you paid back a total of $600. Which of the following is the principal in this situation? A B C D $500. 6 months. $100. $600. 11. If you decide to rent a place to live, you’ll need to sign a _____. A Mortgage. B Rental Withdrawal. C Lease. D Claim. 12. If you pay off only the amount owed on your credit card each month, but don’t pay it off completely, what’s that called?  A B C D Making your minimum payment. Paying your balance. Making your interest-avoidance payment. Paying your dues. 13. Your account statement arrived. You had a balance of -$52.79. After the $307.74 deposit from Rolands Bookstore, what is your new account balance?  A B C D $316.95. $256.92. $265.29. $254.95. 14. On Jan. 8, your account was charged $30.00 for an overdraft fee. Why did that happen? A B C D It was time for the monthly fee you pay to maintain your account. You spent more than what was in your account. You went over the limit of transactions per month. You wrote three checks that month and you have to pay a $10 fee for each one. 15. Why wouldn’t every purchase you made show up on your account statement? A B C D Some take time to clear. Only purchases over $100 are included on your statement. Your account statement only shows withdrawals, not purchases. Your statement only includes suspicious purchases. 16. How  often are you required to make payments on an auto loan?  Once a week. A B Every other week. C Once a month. D Every time you get a paycheck. 17. Your new health insurance has a $4,000 deductible. What does that mean? A You’ll pay the insurance company $4,000 a year to cover all of your medical expenses. B Your insurance will cover up to $4,000 of your medical expenses each year and then you’ll have to cover the rest. C You’ll need to pay $4,000 on medical expenses each year before your insurance will kick in. D Your insurance will pay up to $4,000 for each medical visit you have. 18. What’s the difference between net pay and gross pay?  A B C D Gross pay is your total paycheck and net pay is what you take home after taxes. Net pay is your total paycheck and gross pay is what you take home after taxes. Gross pay is what you get from a full time job and net pay is what you get from a part time job. Net pay is what you deposit into an account and gross pay is what you cash. 19. Your employer withholds money from each paycheck. What is this money used for? A B C D To make up for hours of work you missed. To pay for federal and state taxes. To maintain your office building. To deposit into a separate company account. 20. Which of the following would you budget for in “Utilities”?  A B C D Your college savings fund. Your electric and heating bills. Your grocery budget. Your car repairs. 21. What is a health insurance copay? A B C D The amount you pay when you visit a doctor. The amount you pay for insurance each month, regardless of if you go to the doctor. The tip you give to the doctor if you think they did a good job. The amount your insurance will be required to pay after you visit the doctor. 22. There are many costs associated with owning a car. Which of these is not something you’ll need to pay for? A B C D Maintenance. Registration. Inspection. Arbitration. 23. You walk outside only to find that your car has been towed because you were parked illegally. You paid the towing company with a check and took this unexpected expense from which budget? A Entertainment. B Utilities. C Reserves. D Rent.