BUDGETING TEST QUESTIONS AND ANSWERS | COMPLETE BUDGETING STUDY
GUIDE & PRACTICE TEST 2026/2027
gross pay vs net pay - ✔✔Income before taxes and deductions are taken (gross) versus income after
taxes and deductions have been taken(net)
When you are creating a budget, should you use your gross pay or net pay? - ✔✔Your net pay is the
only figure you should use for a personal budget
When creating a budget, which list below portrays expense categories in the most responsible order? -
✔✔All of your needs, savings, high priority wants, low priority wants
Why is it important to create a budget? - ✔✔A budget will help you save money and prioritize your
spending
Which of the following situations is an example of net pay?
a. Brian multiplies his hourly wage by his total hours worked
b. Chrissy multiplies their hourly wage by their total hours worked and subtracts
taxes
c. Timothy multiplies his hourly wage by his total hours worked then subtracts
taxes and deductions
d. Helene multiplies her hourly wage by her total hours worked then subtracts
taxes, deductions, and budgeted needs - ✔✔c. Timothy multiplies his hourly wage by his total hours
worked then subtracts
Fixed Expense vs. Variable Expense - ✔✔Fixed expenses generally cost the same amount each month
(such as rent, mortgage payments, or car payments), while variable expenses change from month to
month (dining out, medical expenses, groceries, or anything you buy from a store).
What is a 50/30/20 budget? - ✔✔50% needs, 30% wants, 20% savings
What is zero-based budgeting? - ✔✔every single dollar of your income is assigned to a specific
expense, leaving you with a balance of $0. This method requires you to anticipate all of your upcoming
expenses so that you can allot your income to the appropriate expenses.
How does envelope budgeting work? - ✔✔you put specific amounts of your money into envelopes
(physically with cash, or electronically with an app or spreadsheet) representing different budget
categories. Once you have exhausted the funds in an envelope, you can no longer spend within that
budget category until the next month.
Desean sets up his zero based budget and has $175 left after he assigns all of his expenses to each
category. What would be a good category for him to put that money in? - ✔✔saving for emergencies,
contributing to a retirement fund, reducing debt, or increasing discretionary spending.
What is one benefit of envelope budgeting? - ✔✔may help you curb overspending because it limits
what you have available.
GUIDE & PRACTICE TEST 2026/2027
gross pay vs net pay - ✔✔Income before taxes and deductions are taken (gross) versus income after
taxes and deductions have been taken(net)
When you are creating a budget, should you use your gross pay or net pay? - ✔✔Your net pay is the
only figure you should use for a personal budget
When creating a budget, which list below portrays expense categories in the most responsible order? -
✔✔All of your needs, savings, high priority wants, low priority wants
Why is it important to create a budget? - ✔✔A budget will help you save money and prioritize your
spending
Which of the following situations is an example of net pay?
a. Brian multiplies his hourly wage by his total hours worked
b. Chrissy multiplies their hourly wage by their total hours worked and subtracts
taxes
c. Timothy multiplies his hourly wage by his total hours worked then subtracts
taxes and deductions
d. Helene multiplies her hourly wage by her total hours worked then subtracts
taxes, deductions, and budgeted needs - ✔✔c. Timothy multiplies his hourly wage by his total hours
worked then subtracts
Fixed Expense vs. Variable Expense - ✔✔Fixed expenses generally cost the same amount each month
(such as rent, mortgage payments, or car payments), while variable expenses change from month to
month (dining out, medical expenses, groceries, or anything you buy from a store).
What is a 50/30/20 budget? - ✔✔50% needs, 30% wants, 20% savings
What is zero-based budgeting? - ✔✔every single dollar of your income is assigned to a specific
expense, leaving you with a balance of $0. This method requires you to anticipate all of your upcoming
expenses so that you can allot your income to the appropriate expenses.
How does envelope budgeting work? - ✔✔you put specific amounts of your money into envelopes
(physically with cash, or electronically with an app or spreadsheet) representing different budget
categories. Once you have exhausted the funds in an envelope, you can no longer spend within that
budget category until the next month.
Desean sets up his zero based budget and has $175 left after he assigns all of his expenses to each
category. What would be a good category for him to put that money in? - ✔✔saving for emergencies,
contributing to a retirement fund, reducing debt, or increasing discretionary spending.
What is one benefit of envelope budgeting? - ✔✔may help you curb overspending because it limits
what you have available.
