TLE A4 2025

What is the primary benefit of creating a personal budget?

• To avoid paying bills

• To manage financial resources effectively

• To spend freely without tracking expenses

• To save money without planning

Which of the following expenses is typically considered a "variable expense"?

• Mortgage payment

• Internet bill

• Groceries

• Health insurance

What does the term "emergency fund" usually refer to?

• Money set aside for planned vacations

• Funds used to cover unexpected expenses

• A loan taken from the bank for emergencies

• Savings for long-term investments

What is the first step in creating a budget?

• Borrowing money from friends

• Tracking and categorizing your income and expenses

• Spending money as needed

• Setting aside half your income for wants

What percentage is typically recommended for savings in the 50/30/20 budgeting rule?

• 10%

• 20%

• 30%

• 50%

Which of the following is NOT a characteristic of a "fixed expense"?

• Predictable in amount

• Recurring at regular intervals

• Can fluctuate month to month

• Often includes rent or loan payments

If you find that your expenses exceed your income, what is the best course of action?

• Increase your spending to compensate

• Ignore the issue and hope it resolves itself

• Review and cut unnecessary expenses

• Take out more credit card debt

What is the purpose of reviewing your budget periodically?

• To make sure you're overspending

• To adjust for changes in income or expenses

• To avoid saving money

• To stop tracking expenses altogether

Which of the following is considered a personal resource?

• Skills and talents

• Environmental factors

• Global economy

• Natural disasters

What is the primary purpose of managing personal resources?

• To increase external dependency

• To efficiently utilize time, energy, and finances

• To spend all resources quickly

• To avoid personal development