Financial Literacy Test

Front

What is a budget?

Back

A detailed plan for saving, spending, and investing your money.

Front

What is the purpose of a budget?

Back

To create a plan for spending and managing finances effectively.

Front

What is the difference between income and expenses?

Back

Income is the money you earn, while expenses are the money you spend.

Front

What is financial literacy?

Back

The ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing.

Front

What are fixed expenses?

Back

Expenses that do not change from month to month, such as rent or mortgage payments.

Front

What are variable expenses?

Back

Expenses that can change from month to month, such as groceries or entertainment.

Front

Why is it important to track expenses?

Back

To ensure you do not spend more than you have and to manage your finances better.

Front

What is the significance of saving money?

Back

Saving money helps you prepare for emergencies, future purchases, and financial goals.

Front

What does it mean to live within your means?

Back

Spending less than or equal to your income to avoid debt.

Front

What is the impact of compound interest?

Back

Compound interest allows your savings to grow faster over time as interest is earned on both the initial principal and the accumulated interest.