Budgeting basics quiz

All 10 questions and answers

Want to check an answer or run the quiz out loud? Every question is here, with the answer hidden until you open it.

1. In the 50/30/20 rule, what share of take-home pay goes to needs?
   • 70%
   • 20%
   • 50%
   • 30%
   Show answer

   50%. 50% to needs, 30% to wants and 20% to savings and extra debt payments.

2. How many months of essential costs does an emergency fund commonly cover?
   • 5 years
   • 3 to 6 months
   • 1 month
   • 1 week
   Show answer

   3 to 6 months. Less secure incomes may need more.

3. Which of these is a 'need'?
   • New sneakers
   • Takeaway dinners
   • Streaming subscriptions
   • Rent
   Show answer

   Rent. Needs are costs you can't easily avoid.

4. Rent that stays the same each month is a…
   • Discretionary expense
   • Fixed expense
   • One-off expense
   • Variable expense
   Show answer

   Fixed expense. Groceries and electricity are variable.

5. What is a 'sinking fund'?
   • A failing investment
   • A bank fee
   • A loan for a boat
   • Money saved bit by bit for a known future cost
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   Money saved bit by bit for a known future cost. Car registration and Christmas are classic examples.

6. 'Net' pay means pay…
   • Including super
   • Including bonuses only
   • Before tax
   • After tax and deductions
   Show answer

   After tax and deductions. Budget with your net pay, because that's what reaches your account.

7. What is usually the best first step in making a budget?
   • Take out a loan
   • Track what you actually spend for a few weeks
   • Buy budgeting software
   • Cut all fun spending
   Show answer

   Track what you actually spend for a few weeks. You can't plan well without knowing where the money goes.

8. Comparing the unit price on shelf labels helps you…
   • Build credit
   • Earn interest
   • Avoid GST
   • Find the cheapest option per gram, litre or item
   Show answer

   Find the cheapest option per gram, litre or item. Larger packs aren't always cheaper per unit.

9. Waiting before buying something you didn't plan to buy helps avoid…
   • Inflation
   • Impulse purchases
   • Bank fees
   • Taxes
   Show answer

   Impulse purchases. A 24-hour pause is a common rule of thumb.

10. An account fee of $5 a month costs how much a year?
    • $60
    • $50
    • $65
    • $5
    Show answer

    $60. Small regular fees add up.