Personal Finance Basics

What is a budget?

• A plan for making and spending money

• A detailed report of your income

• A loan request form

• A summary of your investments

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DOK Level 1: Recall

Why is a good credit score important?

• It determines your eligibility for a library card

• It affects your ability to get a job

• It influences the interest rates on loans you qualify for

• It increases your social media followers

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DOK Level 1: Recall

Which of the following is a basic principle of investing?

• Spend more than you earn

• Keep all your savings under your mattress

• Diversify your investment portfolio

• Invest all your money in one stock to maximize profits

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DOK Level 2: Skill/Concept

What does a fixed-rate mortgage mean?

• The interest rate changes based on the stock market

• The interest rate and monthly payment remain the same throughout the life of the loan

• The mortgage must be repaid in full within 5 years

• The initial interest rate is fixed for a period, then adjusts annually

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DOK Level 2: Skill/Concept

How can you improve your credit score?

• By frequently applying for new credit cards

• By paying bills on time

• By maxing out your credit card every month

• By never using any form of credit

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DOK Level 2: Skill/Concept

What is the purpose of an emergency fund in budgeting?

• To cover unexpected expenses without needing to borrow money

• To spend on luxury items

• To invest in the stock market

• To pay for regular monthly bills

Why is creating a budget so important? Check all that apply.

• It can help you reach your savings goals for what you want or need.

• It can help you keep track of your neighbor's financial habits.

• It can help you make better financial decisions.

• It can help you get a better job.

• It can help you see your spending habits so you can adjust them to what you want or need/

Would you rather have a lot of money but have someone else decide how you spend it, or have a little money but you can spend it however you like?

• A lot of money and have someone else control how I spend it

• A little money and you decide how you spend it

What is an effective strategy for managing debt?

• Taking out more loans to cover existing debt

• Paying only the interest on loans

• Ignoring debt collection calls

• Prioritizing high-interest debt first