WISE Review: Budgeting and Spending Plans

What does the acronym SMART stand for in financial goals?

• Specific, Measurable, Action-oriented, Realistic, Time frame

• Simple, Manageable, Achievable, Reliable, Timely

• Strategic, Measurable, Attainable, Relevant, Timely

• Specific, Measurable, Achievable, Realistic, Timely

Grace is planning her finances for the upcoming year. What is the purpose of creating a budget?

• To track income and expenses for one or two months

• To increase spending on luxury items

• To eliminate all fixed expenses

• To avoid saving money

What should be included in an emergency fund according to the document?

• Three to six months of income

• One month of income

• Two years of income

• One week of income

Anika is trying to manage her monthly expenses. What is a strategy she can use for balancing her budget?

• Comparison shopping

• Ignoring fixed expenses

• Increasing impulse purchases

• Eliminating all savings

David is planning to buy a new car in the next few years. What is the advantage of having savings according to the document?

• Savings help to achieve goals and the money is liquid

• Savings eliminate all financial risks

• Savings increase spending power immediately

• Savings are not necessary for financial planning

Emma realized she overspent on dining out this month. What should she do to balance her budget?

• Ignore the overspending and continue as usual

• Reduce spending in other areas to compensate

• Increase your income immediately

• Take out a loan to cover the overspending

What is a recommended approach to setting financial goals?

• Setting specific and measurable goals

• Setting goals that are impossible to achieve

• Setting goals without a timeline

• Setting vague and flexible goals

Abigail wants to manage her finances better. How can she effectively track her spending habits?

• By estimating expenses at the end of the year

• By only tracking large expenses

• By using a budgeting app or spreadsheet

• By ignoring small purchases

Isla is creating a budget for her monthly expenses. What is a common mistake she might make?

• Overestimating expenses

• Including all sources of income

• Underestimating variable expenses

• Setting aside money for savings