Finance Basics Quiz

What is a budget?

• A plan to spend as much money as possible

• A detailed plan for all financial resources and expenses

• A list of things you wish to buy

• A record of past purchases

Why is budgeting important?

• It helps you earn more money

• It ensures you spend all your money each month

• It helps you control your spending and save money

• It is only important for businesses, not individuals

What is a savings account?

• A type of loan from a bank

• A place to keep your money safe and earn interest

• A special account for buying things online

• An account for paying bills

What is the purpose of saving money?

• To spend it all on a big purchase

• To have money in case of an emergency

• To give it all away

• To lose interest over time

What is a good strategy for saving money?

• Spending it before someone else does

• Saving whatever is left at the end of the month

• Setting aside a fixed amount or percentage of your income regularly

• Borrowing money instead of saving

What does it mean to have a good credit score?

• You have a lot of debt

• You have never borrowed money

• You manage your debt well and make payments on time

• You pay the minimum payment on credit cards

Why is it important to understand the terms of a credit card before using it?

• To know how many rewards points you can earn

• To understand the fees, interest rates, and payment requirements

• To find out the color of the credit card

• To know how many credit cards you can have

What can happen if you only make the minimum payment on a credit card each month?

• You will pay off the debt faster

• You will not owe any interest

• It can take a long time to pay off your debt and cost you more in interest

• Your credit score will increase quickly

How can you avoid overspending?

• By using credit cards for all purchases

• By keeping a record of your income and expenses

• By borrowing money from friends

• By shopping every day

Why is it important to review and adjust your budget regularly?

• To make sure you are spending more than you earn

• To ensure it still fits your financial goals and situation

• To find ways to reduce your savings

• Because it is a legal requirement