Spending and Budgeting Skills

What is the first step in creating a budget?

• Guessing income and expenses

• Determine income and expenses

• Start spending without tracking

• Ignoring financial statements

How often should you track your expenses?

• Regularly

• Never

• Once a year

• Only when you have extra time

What is a SMART financial goal?

• Silly, Messy, Awkward, Random, Tiring

• Simple, Meaningful, Attainable, Realistic, Timely

• Stressful, Miserable, Aggravating, Ridiculous, Tedious

• Specific, Measurable, Achievable, Relevant, Time-bound

What is the difference between needs and wants?

• Needs are essential for survival, while wants are desires or preferences.

• Needs are the same as wants

• Needs are temporary, wants are permanent

• Needs are only for rich people, wants are for everyone

Why is it important to make a spending plan?

• To spend money without any plan

• To have no control over expenses

• To never save for future goals

• To track and control expenses, prioritize spending, and save for future goals.

What is the impact of impulse buying on your budget?

• It can lead to overspending and have a negative impact on your budget.

• It has no impact on your budget

• It can improve your financial situation

• It can help you save money in the long run

List three categories where you can cut back on expenses.

• Traveling, groceries, and utilities

• Gifts, charity, and savings

• Clothing, healthcare, and education

• Dining out, entertainment, and subscription services

How can you avoid impulse buying?

• Wait until the last minute to make a purchase

• Buy whatever catches your eye

• Ignore your budget and spend freely

• Create a budget and stick to it, make a shopping list, and avoid emotional shopping.

What are the benefits of setting financial goals?

• Setting priorities, tracking progress, and staying motivated to save and invest.

• Not having a plan and just hoping for the best

• Feeling overwhelmed and stressed about money

• Spending recklessly and not worrying about the future

Explain the 50/30/20 rule in budgeting.

• Allocating 50% of income to needs, 30% to wants, and 20% to savings or debt repayment.

• Allocating 50% of income to debt repayment, 30% to savings, and 20% to needs.

• Allocating 50% of income to savings, 30% to needs, and 20% to wants.

• Allocating 50% of income to wants, 30% to savings, and 20% to needs.