AnswersFL-2102373-Personal Finance and Money Management HonorsSocial Security and Medicare

Personal Budget Answers

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1
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What is one difference between yearly and monthly budgets?

A
Yearly budgets show a greater degree of planning, so it is appropriate to plan expenses more strictly and in a more detailed fashion in a yearly budget.
B
Monthly budgets should focus on the short term, so it is not appropriate to consider planned but future expenses (such as a vacation) in a monthly budget.
C
Yearly budgets are a better view of your financial goals, so you should work very hard to avoid changing yearly budgets.
D
There is more uncertainty as you plan further ahead, so a yearly budget needs more room to account for unplanned expenses than a monthly budget does.
2
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Damian wants to save $7200 to buy a car within the next 2 years. Which budget would help Damian save enough money to buy a car in a timely manner with minimal effect on his other essential expenses? Monthly Budget Budget A Budget B Budget C Budget D Income $1000 $1,000 $1,000 $1,000 Expenses- Rent Utilities Food Bus Pass Car Savings School Savings $300 $75 $150 $25 $350 $100 $300 $75 $150 $25 $250 $200 $300 $75 $75 $0 $300 $250 $300 $75 $150 $25 $100 $350

A
Budget A
B
Budget B
C
Budget C
D
Budget D
3

Damian wants to save $7200 to buy a car within the next 2 years. Which budget would help Damian save enough money to buy a car in a timely manner with minimal effect on his other essential expenses? Monthly Budget Budget A Budget B Budget C Budget D Income $1000 $1,000 $1,000 $1,000 Expenses- Rent Utilities Food Bus Pass Car Savings School Savings $300 $75 $150 $25 $350 $100 $300 $75 $150 $25 $250 $200 $300 $75 $75 $0 $300 $250 $300 $75 $150 $25 $100 $350

A
Budget A
B
Budget B
C
Budget C
D
Budget D
4

Predict how much money can be saved without having a negative actual net income.Monthly BudgetBudgeted AmountActual AmountIncome Wages$1025$675Expenses Rent Utilities Food Cell Phone Savings $300$100$175$75$300$300$100$200$75$____Net Income$75$____

A
It is not possible to save any money this month without having a negative actual net income.
B
$350 can be saved resulting in an actual net income of $0.
C
$200 can be saved resulting in an actual net income of $75.
D
Because there is a $75 budgeted net income, that $75 can be put towards savings.
5

Robert is currently working for a landscaping company earning $1520 per month. He has a dream of starting his own landscaping company and figures he would need to save $5000 to buy his own equipment. Select the budget that would help Robert most quickly achieve his financial goal of starting his own business, while still meeting his basic needs. Monthly Budget Budget A Budget B Budget C Budget D Income $1520 $1520 $1520 $1600 Expenses Rent Utilities Food Cell Phone Savings Entertainment Clothing $400 $80 $250 $0 $400 $220 $130 $400 $80 $25 $75 $600 $320 $0 $400 $80 $150 $70 $500 $125 $120 $400 $80 $400 $110 $260 $200 $150 Net Income $40 $20 $75 $0

A
Budget A
B
Budget B
C
Budget C
D
Budget D
6

The actual income for this month has been reduced by $200. How can this budget be modified so there will be a positive actual net income? Monthly BudgetBudgeted AmountActual AmountIncome Wages$1250$1050Expenses Rent Utilities Food Clothes Cell Phone$450$150$220$200$75$____$____$____$____$____Net Income$155$____

A
This budget can be modified by increasing the amount spent on food and utilities and decreasing the amount spent on clothes and rent, thereby maintaining a positive actual net income.
B
This budget can be modified by reducing the amount spent on rent and utilities, thereby reducing overall expenses to have the maximum amount of money for all other expenses.
C
This budget can be modified by reducing the amount spent on food and clothes, thereby reducing overall expenses to have the maximum amount of money for fixed expenses and maintaining a positive actual net income.
D
This budget cannot be modified.
7

When preparing a monthly budget, describe how net income is calculated.

A
Net income is calculated by taking the expenses subtotal and subtracting the income subtotal.
B
Net income is calculated by taking the income subtotal and subtracting the expenses subtotal.
C
Subtracting the expenses subtotal from the net income will give you the income subtotal.
D
Adding the expenses subtotal to the net income will give you the income subtotal.
8

Predict how much money can be saved without having a negative actual net income.Monthly BudgetBudgeted AmountActual AmountIncome Wages$1025$675Expenses Rent Utilities Food Cell Phone Savings $300$100$175$75$300$300$100$200$75$____Net Income$75$____

A
It is not possible to save any money this month without having a negative actual net income.
B
$350 can be saved resulting in an actual net income of $0.
C
$200 can be saved resulting in an actual net income of $75.
D
Because there is a $75 budgeted net income, that $75 can be put towards savings.
9

Tristan has found a good job as a bookkeeping clerk after finishing his associates degree at the local community college. He is making a beginning annual salary of $19,760. How can this increased income affect his financial decisions? Compare his previous budget when he worked part time while finishing his degree with his current budget after getting a full time job. Monthly Budget Previous Budget Current Budget Income Wages $786 $1646 Expenses Rent Utilities Groceries Savings Car Expenses Entertainment $300 $60 $130 $120 $150 $20 $600 $120 $200 $350 $150 $120 Net Income $6 $106 a. Tristan is spending too much money on groceries and entertainment. b. Tristan is earning quite a bit more in his full time job. He is spending more on rent, utilities, food, and entertainment, as well as saving $350 each month. c. Tristan is earning double his previous wages. He should double his expenses, as well. d. Tristan's increased income should have no effect on his financial decisions. Please select the best answer from the choices provided

A
A
B
B
C
C
D
D
10

Analyze the following budget, with an income of $600, to determine how much can be spent on food for the month. Month________Budgeted AmountCell Phone$65Food$___Entertainment$95College Savings$200Car Expenses - Gas, Insurance$160

A
$210 can be spent on food.
B
$145 can be spent on food.
C
$80 can be spent on food.
D
$260 can be spent on food.
11

If $2300 is spent on vacations or travel each year, estimate how much should be set aside each month for those expenses?

A
Approximately $200 per month should be set aside for vacation or travel expenses.
B
Approximately $2300 per month should be set aside for vacation or travel expenses.
C
Approximately $1250 per month should be set aside for vacation or travel expenses.
D
Approximately $230 per month should be set aside for vacation or travel expenses.
12

Tanisha lives with her older sister and helps with the rent by paying $500 per month. Her annual salary as a child care specialist is $14,700 after taxes. Shopping is her favorite pasttime and loves buying new things, but she also wants to save money for her college classes. Select the budget that would best help meet her goals.Table AMonthly BudgetBudget ABudget BBudget CBudget DIncome$1,470$1,225$1,470$1,225Expenses - Rent Food & Personal Items Clothes Savings$500$120$50$700$500$120$150$400$500$120$400$400$500$120$400$150

A
Budget A
B
Budget B
C
Budget C
D
Budget D
13

Lauryn’s wages were not as much as she had budgeted. How can her budget be modified so there will be a positive actual net income?

Question illustration
A
Reduce the college savings expense by $50.
B
Reduce the clothes expense by $75.
C
Reduce the recreation expense by $25.
D
Do all of the above.
14

Tristan has found a good job as a bookkeeping clerk after finishing his associates degree at the local community college. He is making a beginning annual salary of $19,760. How can this increased income affect his financial decisions? Compare his previous budget when he worked part time while finishing his degree with his current budget after getting a full time job. Monthly Budget Previous Budget Current Budget Income Wages $786 $1646 Expenses Rent Utilities Groceries Savings Car Expenses Entertainment $300 $60 $130 $120 $150 $20 $600 $120 $200 $350 $150 $120 Net Income $6 $106 a. Tristan is spending too much money on groceries and entertainment. b. Tristan is earning quite a bit more in his full time job. He is spending more on rent, utilities, food, and entertainment, as well as saving $350 each month. c. Tristan is earning double his previous wages. He should double his expenses, as well. d. Tristan's increased income should have no effect on his financial decisions. Please select the best answer from the choices provided

A
A
B
B
C
C
D
D
15

Examine the following budget:Monthly BudgetBudgeted AmountActual AmountIncome Wages$1000$850Expenses Car - gas, insurance Food & Personal Items Cell Phone College Savings Recreation Clothes$300$200$75$200$75$85$300$220$75$200$80$60Net Income$65 What is the actual net income for the month? What, if any, changes could have been made to the actual amounts this month to keep the actual net income at a positive value?

A
The actual net income for the month is -$85. Less money could have been spent on food, recreation and clothes.
B
The actual net income for the month is $85. No changes necessary.
C
The actual net income for the month is -$85. No changes necessary.
D
The actual net income for the month is $85. Less money could have been spent on food, recreation and clothes.

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