SSPFL2 & SSPFL3

What is the primary purpose of setting savings goals?

• To make spending decisions easier

• To increase motivation and provide direction for budgeting

• To impress financial advisors

• To qualify for bank loans

Which of the following best describes a budget?

• A list of monthly expenses

• A record of past spending

• A plan for allocating scarce income among competing uses

• A document showing only savings goals

In financial terms, what is net worth?

• Total income minus taxes

• Assets plus liabilities

• Monthly savings minus expenses

• Assets minus liabilities

What is the primary distinction between needs and wants?

• Needs are required for survival while wants are desirable but not essential

• Needs are luxuries while wants are basics

• Needs change monthly while wants remain constant

• Needs are always more expensive than wants

Which formula correctly represents how to calculate a budget?

• Budget = Expenses - Income + Savings

• Budget = Savings - Income - Expenses

• Budget = Income - Expenses - Savings

• Budget = Income + Expenses + Savings

What is the purpose of reconciling a checking account?

• To earn interest on deposits

• To match and balance financial records

• To avoid paying bank fees

• To increase savings automatically

Which type of expenses remain constant over an extended period?

• Variable Expenses

• Unplanned Expenses

• Fixed Expenses

• Seasonal Expenses

What is an overdraft?

• Using more money than is available in your checking account

• A type of savings account

• A method of earning interest

• A way to increase credit score

Which of the following is considered a liability?

• Savings account balance

• Personal property

• Investment portfolio

• Credit card debt

Why do banks charge overdraft fees?

• To encourage savings

• To process deposits faster

• As both a penalty and to cover processing costs

• To increase account balances