Finance Basics

What is a simple definition of personal finance?

• The study of government economies

• Managing a company's finances

• Managing your money, including saving and investing

• The process of borrowing money from banks

Why is it important to save money?

• To spend more on luxury items

• To have funds available for future needs or emergencies

• To lend money to friends

• To pay more taxes

What is a budget?

• A plan for making and spending money

• A detailed report of past expenses

• A loan request form

• A wish list of items to buy

What does it mean to invest money?

• To save it under your mattress

• To spend it on vacations

• To use it to buy assets that could increase in value over time

• To donate it to charity

What is the purpose of creating a personal budget?

• To ensure you spend all your money each month

• To keep track of friends' expenses

• To plan how to spend and save your money wisely

• To calculate how much tax you owe