Financial Literacy

What is a budget?

• A budget is a type of investment strategy.

• A budget is a method for calculating taxes.

• A budget is a document for tracking employee performance.

• A budget is a financial plan for managing income and expenses.

Why is it important to track income and expenses?

• To avoid budgeting altogether.

• To increase spending without limits.

• It is important to track income and expenses to manage finances effectively and make informed financial decisions.

• To ignore financial goals and plans.

How can you differentiate between a need and a want?

• A need is something you can buy; a want is something you can borrow.

• A need is essential for survival; a want is a desire for non-essential items.

• A need is a temporary desire; a want is a permanent requirement.

• A need is a luxury item; a want is something you can live without.

What is the purpose of insurance?

• The purpose of insurance is to provide financial protection and risk management.

• To eliminate all forms of uncertainty.

• To increase financial risks for individuals.

• To provide free services to everyone.

How can creating a budget help you save money?

• Creating a budget eliminates all expenses immediately.

• Tracking expenses is unnecessary if you have a high salary.

• A budget only helps in increasing your income.

• Creating a budget helps you save money by allowing you to track expenses, identify savings opportunities, and prioritize financial goals.

What is a fixed expense?

• A fixed expense is a one-time payment.

• A fixed expense is an optional cost.

• A fixed expense varies each month.

• A fixed expense is a regular, unchanging cost.

What is a variable expense?

• A variable expense is a fixed cost that remains the same each month.

• A variable expense is a cost that varies in amount and frequency.

• A variable expense is a one-time payment that does not recur.

• A variable expense is a cost that is always predictable and stable.

How can you adjust your budget if your income changes?

• Increase all expenses to match the new income

• Reassess income, prioritize expenses, cut discretionary spending, and update the budget.

• Ignore the income change and maintain the same budget

• Invest all savings without adjusting the budget

Which of the following is correct about income vs. expense?

• Income is money paid

• Income is money earned

• Expense is money earned

• Expense is not relevant

A portion of money being deducted from our income and

paid to the government is refer to as____

• GST (Goods & Services Tax)

• Interest

• Income Tax

• Budget