Reducing Your Spending

Reducing Your Spending

Are you ready to test your knowledge about reducing your spending? This ten-question multiple-choice quiz will explore various ways to reduce your spending. After completing all ten questions, click "What's my grade?" at the end of the quiz to see how you did.

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If you spend $4.25 a day on carry-out coffee, how much will you spend on carry-out coffee annually?
At $4.25 per cup over a span of 365 days, you will spend $1,551.25, or an average of $129.70 per month. Brewing your own coffee and bringing it from home costs significantly less.

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Which of the following are true regarding extended warranties?
In deciding whether an extended warranty is right for you, you´ll have to understand the current warranty available on your vehicle, appliance, or other household items, the reliability record of that item, what is covered by the extended warranty, and whether a deductible applies. Keep in mind that extended warranty companies offer these products so that they will come out ahead financially. That means that most consumers will not benefit financially from them. Having an extended warranty can bring you peace of mind. They can also save you from out-of-pocket expenses that you might otherwise not be able to afford. But for the most part, you are better off shopping around for the most reliable product you can find and maintaining it properly throughout its life.

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What do experts recommend that you do to reduce your weekly grocery spending?
Careful planning before you shop can save you both time and money. Shopping with a list keeps you focused on buying only the things you need and limits the impulse buys that can inflate your grocery bill. Finding coupons for frequently used items or brands similar to your preferred choice can further reduce your grocery bill. Once you're in the store, focusing on the price per unit rather than the package's size can help you avoid deceptive packaging practices.

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What percentage of your monthly gross income do experts recommend that you spend on housing?
As a rule of thumb, most experts put the number at between 25% and 35%. Standard housing ratios used to determine what monthly mortgage payment a household can afford are 28 percent for FannieMae or FreddieMac backed mortgages. Like most things, there should be some flexibility used in making this determination. For example, individuals with very high annual incomes will tend to have much more disposable income to put towards rent or a mortgage payment.

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If you were to replace a single standard incandescent light bulb with a light emitting diode (LED) bulb, what would the expected annual electrical cost savings be?
A LED light bulb uses about 15% of the electrical power of a standard incandescent bulb. An average LED bulb will use only 8 to 9 watts than 60 watts for the standard light bulb. For a bulb that is used for four hours per day, with a cost per kilowatt of $0.10, the savings will be roughly $7.00. The 60-watt bulb would cost $8.76, while the 15-watt bulb would be $1.17.

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Which of the following are many consumers eliminating from their household budget due to technological advances and the advent of new services?
With the advent of new streaming video services and mobile phone proliferation, 'cord cutting' is a popular savings opportunity for budget-conscious homeowners and renters. Streaming video offerings such as Netflix, Amazon Prime, and Hulu can often replace most cable offerings and DVD rentals. Landline phones are becoming 'nice to have' when most individuals are carrying a mobile phone.

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What is the difference between name brand and generic medication?
Generic medications are defined as "a drug product that is comparable to a brand/reference listed drug product in dosage form, strength, quality and performance characteristics, and intended use." According to the Food & Drug Administration, health care professionals and consumers can be assured that FDA approved generic medications meet the same rigid standards as the original brand name medication.

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How much should you be paying in interest charges on your credit card each month?
It is best to pay off the card balance at the end of each month in order to avoid any interest charges. It will be very beneficial to get into this habit in order to build your credit score which will allow you to get better interest rates and loan approvals.

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What single action can save the average consumer the most money from your home energy bills?
For most homeowners and renters, reducing the heating bill provides the greatest opportunity for savings. Turning down the thermostat is the easiest way to grab these savings. But you might also benefit from increasing your home's efficiency by caulking or weatherstripping windows and doors or upgrading the insulation in your home.

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Which of the following are good ways to reduce your transportation costs?
It's pretty simple, the less energy you use in commuting to and from work or around town, the more you'll save on transportation costs. Reducing the number of trips you make into the office, ride-sharing as part of a carpool, or the use of public transportation and taking it easy when you are behind the wheel are all ways for you to reduce your transportation costs.

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