Saving and Spending Quiz

What is budgeting?

• The process of spending money without any plan or organization.

• The process of creating a plan to manage and allocate financial resources.

• The process of saving money for future use.

• The process of investing money in the stock market.

Why is budgeting important?

• Budgeting restricts financial freedom.

• Budgeting only benefits wealthy individuals.

• Budgeting is a waste of time and effort.

• Budgeting helps in planning and managing finances effectively.

What is a savings account?

• A type of bank account where you can withdraw money and pay interest on the balance.

• A type of bank account where you can borrow money and pay interest on the balance.

• A type of bank account where you can deposit money and earn interest on the balance.

• A type of bank account where you can invest money and earn dividends on the balance.

What is the purpose of a savings account?

• To invest in stocks

• To spend money immediately

• To donate to charity

• To store money for future use while earning interest on the balance.

What is the recommended percentage of income to save each month?

• 20%

• 50%

• 30%

• 10%

What is an emergency fund?

• A retirement account for unexpected expenses.

• A savings account specifically set aside for unexpected expenses or emergencies.

• A loan taken out for unexpected expenses.

• A credit card used for emergencies.

What is the purpose of an emergency fund?

• To provide financial security in case of unexpected expenses or emergencies.

• To fund vacations and luxury purchases.

• To pay off credit card debt.

• To invest in high-risk stocks.

What is the difference between fixed expenses and variable expenses?

• Fixed expenses are costs that remain the same every month, while variable expenses can change from month to month.

• Fixed expenses are costs that are not necessary, while variable expenses are essential.

• Fixed expenses are costs that change every month, while variable expenses remain the same.

• Fixed expenses are costs that are paid in cash, while variable expenses are paid by credit card.

What is an example of a fixed expense?

• Rent

• Groceries

• Entertainment

• Vacation

What is an example of a variable expense?

• Rent

• Salary

• Mortgage

• Groceries