Unit 13 Personal Finance

1) Which situation explains how a credit becomes a debt?

• An electronics store extends credit to a buyer, and then owes a debt to the buyer.

• A buyer purchases furniture on credit, and then owes a debt to the furniture store.

• A mechanic exchanges services with a plumber, and incurs a debt to the plumber.

• A farmer purchases used equipment in exchange for a share of the crops grown.

What is a budget?

• a plan for using income

• an amount that must be paid

• an amount of money that is saved

• a personal promise to pay something

What is the advantage to spending less money than is earned?

• You will have lower bills.

• You never have to worry about money.

• You can save money for future purposes.

• You have to make no spending sacrifices.

A personal budget will MOST LIKELY include which item(s)?

• earnings and bills.

• job titles and possible income

• a list of wanted, but not needed, items

• a list of all items purchased in the last 12 months

Why might personal saving decisions be important?

• It is more important to spend money than to save it.

• Spending money on unneeded items can save you money.

• Having a savings account can help you find a better-paying job.

• Saving money can help you prepare for unexpected expenses.

Which quote BEST represents why a personal budget is important?

• "Let justice be done though the heavens may fall." - John Adams

• "What we obtain too cheap, we esteem too lightly" - Thomas Paine

• "Beware of little expenses. A small leak will sink a great ship." - Benjamin Franklin

• "Is life so dear or peace so sweet as to be purchased at the price of chains?" - Patrick Henry

Why might a personal budget include information on BOTH spending AND saving habits?

• People need to learn how to spend more money instead of saving it.

• A personal budget shows people how to spend more money on items they want.

• By knowing how much they spend, people can look for ways to save more.

• Spending and saving habits cannot be changed, so people have to earn more.

Sharice is planning a personal budget. Which part of her budget will be easiest to change?

• income

• savings

• spending on wants

• spending on needs

Which statement BEST describes the benefit of creating a personal budget?

• It can decrease your savings.

• It can increase your spending.

• It can help you make more money.

• It can help you use money more wisely.

Andre creates a budget for himself. He would like to buy a new video game each month, but doesn't have enough money to do so in his current budget. Which parts of Andre's budget could he increase to have enough money for the new video game each month?

• income

• taxes

• saving

• investments