Personal Finance Quiz

What should decide your living expenditures each month?

• Your monthly income

• The cost of living in your area

• Your personal savings goals

• All of the above

What advantages come from saving money?

• Increased financial security

• Ability to make large purchases

• Reduced financial stress

• All of the above

How can saving money lead to more financial freedom and security?

• By allowing for investment in diverse financial instruments

• By increasing dependency on loans and credit

• By limiting financial choices and opportunities

• By creating a dependency on fixed income sources

Why should a person have a budget?

• To be able to set financial goals, both short term and long term

• To ensure they can spend without limits

• To avoid paying taxes

• To impress others with their financial planning skills

Which of the following are examples of good debt?

• Education

• Mortgage

• Payday loans

• Buisness

How does debt differ from credit?

• Debt is money owed, while credit is the amount you borrowed

• Debt increases with purchases, while credit decreases

• Debt is the ability to borrow money, while credit is money owed

• There is no difference between debt and credit

What are some benefits of creating a budget?

• Helps set short and long term financial goals

• Assists in debt management

• Facilitates saving for emergencies

• All of the above

What is a possible risk associated with debt?

• Increased investment in assets

• Higher credit score

• Increased financial leverage

• Bankruptcy

What are the 4 acceptable uses of debt?

• Mortgage, Education, Business and your dreams

• Vacations, luxury shopping, gambling, buying a house

• Education, buying a car, luxury shopping, starting a business

• Starting a business, buying a house, gambling, education

What is the best way in which an individual may build wealth for the future?

• Investing in the stock market

• Saving money under the mattress

• Buying lottery tickets

• Investing in education