Budget Basics

What is the first step in creating a personal budget plan?

• Setting financial goals

• Tracking spending habits

• Listing all sources of income

• Differentiating between needs and wants

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Which of the following is considered a "need" rather than a "want"?

• A new smartphone

• Monthly rent

• Dining out at a restaurant

• A vacation trip

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What is the term for money received from work, investments, or other sources?

• Expense

• Budget

• Income

• Savings

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Which of the following is an example of a fixed expense?

• Groceries

• Utility bills

• Entertainment

• Monthly car payment

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What is the purpose of setting financial goals?

• To track daily spending

• To differentiate between needs and wants

• To plan for future financial stability

• To list all sources of income

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Which tool can help you track your spending habits?

• A calendar

• A budget app

• A cookbook

• A dictionary

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What should you do if you have unexpected expenses?

• Ignore them

• Use your emergency fund

• Borrow money from friends

• Stop budgeting

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Which of the following is an example of a variable expense?

• Mortgage payment

• Car insurance

• Dining out

• Internet bill

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Why is it important to differentiate between needs and wants?

• To increase your income

• To reduce your expenses

• To make better financial decisions

• To track your spending habits

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What is a common method for setting financial goals?

• Using the SMART criteria

• Writing a daily journal

• Asking friends for advice

• Watching financial news

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