Blank quiz 17

What is financial planning?

• A method for investing in stocks only.

• A strategy for avoiding all financial risks.

• Financial planning is the process of creating a strategy to manage finances and achieve personal financial goals.

• A way to save money without a budget.

Why is it important to save money?

• To spend more on luxury items

• It is important to save money for financial security, emergencies, and achieving financial goals.

• To impress others with wealth

• To avoid paying taxes

What is a budget?

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

• A budget is a document for tracking employee performance.

• A budget is a type of investment strategy.

• A budget is a method for calculating taxes.

How can you track your spending?

• Rely solely on memory to recall your expenses.

• Only track spending once a year during tax season.

• Use budgeting apps or spreadsheets to categorize and review your expenses.

• Ignore your receipts and hope for the best.

What is an expense?

• An expense is a cost incurred in the course of business operations.

• An expense is a type of investment.

• An expense is a form of revenue generation.

• An expense is a profit made from sales.

What does it mean to invest money?

• To invest money means to donate it to charity without expecting anything in return.

• To invest money means to save it in a bank account with no interest.

• To invest money means to spend it on immediate consumption.

• To invest money means to allocate it in a way that is expected to generate a profit or increase in value.

Why should you set financial goals?

• To ensure you never save money.

• To spend money without any restrictions.

• To avoid making any financial decisions.

• To provide direction, motivation, and a way to measure financial progress.

What is the difference between needs and wants?

• Needs are essential for survival; wants are non-essential desires.

• Needs are luxuries; wants are necessities.

• Needs can be bought; wants cannot be purchased.

• Wants are always more important than needs.

How can you make a savings plan?

• Spend all income on luxury items

• Ignore tracking expenses

• Invest in stocks without a plan

• Set a savings goal, budget monthly savings, choose an account, and track progress.

What is an emergency fund?

• An emergency fund is a savings account for unexpected expenses.

• A fund for retirement savings.

• A loan for purchasing a car.

• A budget for monthly expenses.