Financial Literacy Quiz

What is income?

• Money that a person receives, typically from work, investments, or business.

• A plan for how to spend and save money over a certain period.

• An expense that stays the same every month.

• Money set aside for future use.

What is a budget?

• An expense that can change from month to month.

• A plan for how to spend and save money over a certain period.

• Money that you earn from your savings.

• Putting money into stocks or bonds.

Why is budgeting important?

• It helps you manage your money, avoid debt, and save for future goals.

• It allows you to spend more than you earn.

• It increases your monthly expenses.

• It reduces your income.

If you earn $100 and spend $70, how much do you have left?

• $50

• $30

• $70

• $100

What is a fixed expense?

• An expense that changes every month.

• An expense that stays the same every month, like rent or a car payment.

• Money saved for emergencies.

• Money earned from investments.

What is a variable expense?

• An expense that stays the same every month.

• An expense that can change from month to month, like groceries or entertainment.

• Money set aside for future use.

• Money earned from savings.

What does “living within your means” mean?

• Spending more than you earn.

• Spending less or the same amount as the money you earn.

• Saving all your income.

• Investing in stocks.

If your income is $200 and your expenses are $250, are you living within your means?

• Yes, because you are saving money.

• No, because you are spending more than you earn.

• Yes, because your expenses are less than your income.

• No, because you are earning more than you spend.

What is savings?

• Money that you spend immediately.

• Money that you set aside for future use rather than spending immediately.

• Money earned from investments.

• An expense that stays the same every month.

Why is saving money important?

• It helps you prepare for emergencies, big purchases, or future goals.

• It allows you to spend more than you earn.

• It increases your monthly expenses.

• It reduces your income.