Mastering Personal Finance Basics

What is the basic principle of effective personal money management?

• Spending more than you earn

• Living within one's income

• Borrowing money frequently

• Ignoring savings

Which of the following is a tool used to plan the spending and saving of income?

• A credit card

• A budget

• A loan

• A bank account

What is one benefit of saving money regularly?

• Increased debt

• Financial security

• Higher interest rates on loans

• More frequent spending

Which of the following is a type of credit option?

• Savings account

• Credit card

• Budget plan

• Expense report

Why is it important to live within one's income?

• To accumulate debt

• To ensure financial stability

• To increase spending

• To avoid saving

How can a budget help in managing personal finances?

• By encouraging impulsive purchases

• By tracking income and expenses

• By eliminating the need for savings

• By increasing credit card usage

What is the cost of using credit if not paid on time?

• No additional cost

• Interest and fees

• Increased savings

• Reduced expenses

How can charts be used in budgeting?

• To hide financial information

• To visually represent income and expenses

• To increase spending

• To avoid planning

What reasoning might someone use to decide between different types of credit options?

• The color of the credit card

• The interest rates and terms

• The popularity of the credit provider

• The number of advertisements seen

How can strategic planning in budgeting lead to better financial outcomes?

• By ignoring unexpected expenses

• By anticipating and preparing for future needs

• By spending all available income

• By avoiding any form of savings