WorksheetsPersonal Finance Objective 1 Review
Total questions: 20
Worksheet time: 21mins
What is the difference between wants and needs?
Wants are short-term desires, while needs are long-term goals.
Wants are tangible items, while needs are intangible.
Wants are things that are necessary for survival, while needs are things that are not essential.
Wants are desires or preferences, while needs are necessities.
Why is it important to differentiate between wants and needs?
To prioritize and allocate resources effectively.
To understand the difference between luxury and necessity.
To make informed decisions about purchases.
To avoid overspending and debt.
Give an example of a want and a need.
A want example: luxury vacation
A need example: shelter
A want example: designer clothing
A want example: new car, A need example: food
How can you prioritize your wants and needs?
Ask others for their opinion.
Rank them based on personal preference.
Make a list and evaluate based on importance and urgency
Choose randomly without any evaluation.
What is opportunity cost?
The value of the chosen alternative
The value of the next best alternative that is forgone when making a decision.
The cost of a decision
The cost of an opportunity
Explain how opportunity cost relates to wants and needs.
Opportunity cost is the value of the alternative that is not chosen when making a choice.
Opportunity cost is the value of the least desirable alternative that is chosen when making a choice.
Opportunity cost is the value of the next best alternative that is forgone when making a choice.
Opportunity cost is the value of the most expensive alternative that is chosen when making a choice.
Why is it important to consider the impact of wants and needs?
To disregard personal preferences
To make impulsive decisions
To prioritize and make informed decisions
To waste time and energy
What are some potential consequences of prioritizing wants over needs?
Financial instability, increased debt, and lack of fulfillment.
Decreased savings, inability to meet basic needs, and strained relationships
How can understanding wants and needs help in making better decisions?
Understanding wants and needs can limit creativity and innovation in decision-making.
Understanding wants and needs is irrelevant in decision-making.
Understanding wants and needs can lead to indecisiveness and confusion.
Understanding wants and needs helps in making better decisions by providing clarity on what is truly important and necessary.
Give an example of a situation where you had to make a decision based on wants and needs.
Deciding to spend money on unnecessary items instead of saving for a future goal.
Deciding to buy a new phone instead of saving money for the vacation.
Deciding to prioritize wants over needs in a financial decision.
Deciding to save money for the vacation instead of buying a new phone.
Income is all the money you earn (make) over a period of time. Usually a month.
True
False
There are two types of expenses. They are ____________ and _______________. Choose two.
Essential Expenses (things that you need)
iReady expenses
Non-Essential Expenses (things you don't need but spend money on anyways)
Something unnecessary but you desire.
Need
Want
Expect
A plan for spending and saving.
Budget
Savings
Income
What is overspending?
Using money you get to spend.
Using more money than you have available.
Using money you have in the bank.
What is the rule that says you should always set aside a portion of your income to save?
Pay yourself first.
Pay your bills first.
Spend what you want first.
What is opportunity cost?
the value of the next best option that is not selected when a choice is made.
there is not enough of it.
things people make to earn money.
actions people do to earn money.
