Finance Basics Quiz

What is the primary purpose of creating a budget?

• To track your spending habits

• To ensure you spend more than you earn

• To avoid paying taxes

• To increase your debt

Which of the following is a common method for saving money?

• Spending all your income

• Investing in high-risk stocks

• Setting aside a portion of your income regularly

• Borrowing money from friends

What is an emergency fund?

• Money set aside for vacations

• Money set aside for unexpected expenses

• Money set aside for buying luxury items

• Money set aside for paying taxes

Which of the following is a financial goal?

• Buying a new video game

• Saving for retirement

• Eating out every day

• Borrowing money

What is the 50/30/20 rule in budgeting?

• 50% needs, 30% wants, 20% savings

• 50% wants, 30% needs, 20% savings

• 50% savings, 30% needs, 20% wants

• 50% needs, 30% savings, 20% wants

Why is it important to set financial goals?

• To spend more money

• To have a clear plan for your financial future

• To avoid saving money

• To increase your debt

Which of the following is a benefit of saving money?

• Increased stress

• Financial security

• Higher debt

• Less disposable income

What is the purpose of a budget review?

• To ignore your financial plan

• To adjust your budget based on actual spending

• To spend more money

• To avoid tracking expenses

Which of the following is a good strategy for achieving financial goals?

• Setting vague goals

• Setting specific and measurable goals

• Ignoring your goals

• Spending all your income

What is the difference between a need and a want?

• A need is essential for survival, a want is not

• A want is essential for survival, a need is not

• Both are essential for survival

• Neither is essential for survival