PFLE Unit 5 Test review

What is the difference between fixed and variable expenses?

• Fixed expenses are costs that remain the same each month, while variable expenses can change from month to month.

• Fixed expenses can change from month to month, while variable expenses remain the same each month.

• Fixed expenses are always higher than variable expenses.

• Variable expenses are costs that do not occur every month.

All of the following are considered non-dischargeable debt EXCEPT?

• Criminal or personal injury settlements

• Alimony (divorce payment to spouse)

• Taxes

• credit card debt

How long can you expect a Chapter 7, ordinary bankruptcy filing, to remain on your credit report?

• 5 years

• 7 years

• 10 years

• 15 years

What are the benefits of saving money?

• Financial security

• Immediate gratification

• Increased spending

• High-interest loans

Why is budgeting important for personal finance?

• It allows individuals to spend without limits.

• Budgeting helps individuals track their income and expenses, prioritize their spending, and save for future goals.

• It is only necessary for wealthy individuals.

• Budgeting is a way to avoid all financial responsibilities.

If you as an individual just need to restructure (reorganize) your debts so that you can make the payments, you would most likely file which of the following types of bankruptcy?

• Ch 7

• Ch 11

• Ch 13

• Ch 12

What are the key components of a budget?

• income, expenses, savings, and financial goals

• revenue, costs, investments, and liabilities

• profits, losses, assets, and equity

• sales, marketing, operations, and management

What is the purpose of setting financial goals while budgeting?

• To have a clear understanding of where your money should go.

• To spend more than you earn.

• To avoid tracking your expenses.

• To increase your debt.

Why is it important to track expenses?

• To manage and control finances, identify overspending, save money, and achieve financial goals.

• To increase spending without limits.

• To avoid budgeting altogether.

• To make financial decisions based on guesswork.

Monthly expenses that do change (different amount every time).

• Fixed Expenses

• Variable Expenses

• Recurring Expenses

• Unexpected Expenses