Understanding Personal Finance Basics 51abcd

What is the starting point for personal financial management?

• Savings

• Income

• Debt

• Investments

Which of the following is a basic reason for creating a household budget?

• To increase debt

• To manage income and expenses

• To avoid paying taxes

• To spend more money

What is one benefit of saving money?

• It increases your debt

• It provides financial security

• It reduces your income

• It eliminates the need for a budget

Which of the following is a risk associated with using debt?

• Earning interest

• Owing more money than you can repay

• Increasing savings

• Receiving a salary

A household budget helps you to:

• Spend without limits

• Track and control your spending

• Avoid saving money

• Increase your debts

Which term describes money received from work, investments, or other sources?

• Debt

• Income

• Budget

• Expense

Why might someone create a household budget?

• To ignore their financial situation

• To plan for future expenses and savings

• To increase their debt

• To avoid tracking spending

How can analyzing a savings graph help you?

• It shows how much you owe

• It helps you understand how your savings grow over time

• It tells you your monthly expenses

• It increases your income

What is a benefit of saving money, as shown in a diagram of savings growth?

• You can see your money decrease

• You can plan for emergencies or future goals

• You can avoid budgeting

• You can increase your debt

Which of the following best describes the use of debt?

• Borrowing money to pay for things you cannot afford immediately

• Saving money for future use

• Earning money from a job

• Creating a budget