BUDGETING BASICS QUESTIONS AND ANSWERS | BUDGETING FUNDAMENTALS
STUDY GUIDE & PRACTICE TEST 2026/2027
Which of the following is not a potential benefit of budgeting? - ANS ✔✔Increasing income
When you're creating a monthly budget for the first time, you should: - ANS ✔✔Keep track of what you
spend for a week or two and use those amounts to estimate your expenses
Which of the following is an example of a fixed expense you need to include in your budget? - ANS
✔✔Rent
True or false: Lawrence is having trouble separating his wants from his needs. So he asks his roommate if
buying lunch every day at a deli near work is a want or a need. His roommate's answer was, "Obviously
it's a need. You have to eat!" - ANS ✔✔False
What should you do if your expenses exceed your income? - ANS ✔✔Plug spending leaks
One way to start saving is to put money into an emergency fund. Why do you need one? - ANS ✔✔Your
computer might die and you'd have to replace it
True or false: If you develop a budget, at least you don't have to worry about debt. - ANS ✔✔False
Which of the following habits will help you stick to your budget? - ANS ✔✔Posting your goals in a place
where you'll see them every day
True or false: One advantage of automatic bill pay is that you don't have to worry about the hassle of
keeping track of your spending because the bank has the records - ANS ✔✔False
How can sticking to a budget help you improve your credit score? - ANS ✔✔N/A
Fixed expenses - ANS ✔✔are amounts that you have to pay every month, no matter what. Rent,
insurance, loan payments, and phone bills are usually fixed expenses. They won't change unless you
move or modify your plan.
Flexible expenses - ANS ✔✔cover other necessities such as food and transportation, but also things that
are fun. How you handle flexible expenses will make or break your budget.
Which of the following is a primary advantage of budgeting? - ANS ✔✔You will be more aware of what
you're spending each month
In making her budget, Lauren looks for places she can cut back. Which one of the following expenses
would be the most difficult to reduce? - ANS ✔✔Insurance payments
In budgeting, what's the biggest difference between fixed and flexible expenses? - ANS ✔✔You can
reduce flexible expenses more easily
STUDY GUIDE & PRACTICE TEST 2026/2027
Which of the following is not a potential benefit of budgeting? - ANS ✔✔Increasing income
When you're creating a monthly budget for the first time, you should: - ANS ✔✔Keep track of what you
spend for a week or two and use those amounts to estimate your expenses
Which of the following is an example of a fixed expense you need to include in your budget? - ANS
✔✔Rent
True or false: Lawrence is having trouble separating his wants from his needs. So he asks his roommate if
buying lunch every day at a deli near work is a want or a need. His roommate's answer was, "Obviously
it's a need. You have to eat!" - ANS ✔✔False
What should you do if your expenses exceed your income? - ANS ✔✔Plug spending leaks
One way to start saving is to put money into an emergency fund. Why do you need one? - ANS ✔✔Your
computer might die and you'd have to replace it
True or false: If you develop a budget, at least you don't have to worry about debt. - ANS ✔✔False
Which of the following habits will help you stick to your budget? - ANS ✔✔Posting your goals in a place
where you'll see them every day
True or false: One advantage of automatic bill pay is that you don't have to worry about the hassle of
keeping track of your spending because the bank has the records - ANS ✔✔False
How can sticking to a budget help you improve your credit score? - ANS ✔✔N/A
Fixed expenses - ANS ✔✔are amounts that you have to pay every month, no matter what. Rent,
insurance, loan payments, and phone bills are usually fixed expenses. They won't change unless you
move or modify your plan.
Flexible expenses - ANS ✔✔cover other necessities such as food and transportation, but also things that
are fun. How you handle flexible expenses will make or break your budget.
Which of the following is a primary advantage of budgeting? - ANS ✔✔You will be more aware of what
you're spending each month
In making her budget, Lauren looks for places she can cut back. Which one of the following expenses
would be the most difficult to reduce? - ANS ✔✔Insurance payments
In budgeting, what's the biggest difference between fixed and flexible expenses? - ANS ✔✔You can
reduce flexible expenses more easily
