Money Matters-Semester 1 Review

What is a budget?

• A plan for how to manage and spend money

• A way to make investments

What is the main purpose of personal finance?

• To earn more money than you spend

• To manage income and expenses wisely

What is an emergency fund?

• Money used for vacation expenses

• A savings buffer for unexpected expenses

Which of the following is a good example of fixed expenses?

• Groceries

• Rent

What is the primary benefit of creating a financial plan?

• Helping to achieve financial goals

• Reducing income

What is gross income?

• Total earnings before deductions and taxes

• Income after taxes and deductions

What is net income?

• Earnings after taxes and deductions

• Total earnings before deductions

Which of the following is commonly deducted from your paycheck?

• Rent

• Social Security tax

What is a W-2 form used for?

• To show your total income for the year

• To claim tax deductions

Which type of tax is deducted from an employee’s paycheck?

• Property tax

• Income tax