Financial Literacy

What is a budget?

• A plan for spending money

• A plan for saving money

• A plan for earning money

• A plan for investing money

What is the purpose of a budget?

• To track income and expenses

• To increase debt

• To spend money impulsively

• To save money

What is savings?

• Money spent on wants

• Money spent on needs

• Money set aside for future use

• Money borrowed from others

What is the recommended percentage of income to save?

• 10%

• 25%

• 50%

• 75%

What is an emergency fund?

• Money saved for vacations

• Money saved for unexpected expenses

• Money saved for retirement

• Money saved for investments

What is an expense?

• Money earned from investments

• Money saved for future use

• Money spent on wants and needs

• Money borrowed from others

What is discretionary spending?

• Spending on essential needs

• Spending on non-essential wants

• Spending on investments

• Spending on debt repayment

What is the difference between fixed and variable expenses?

• Fixed expenses change regularly, while variable expenses remain constant

• Fixed expenses are essential needs, while variable expenses are non-essential wants

• Fixed expenses are predictable, while variable expenses can change

• Fixed expenses are short-term, while variable expenses are long-term

What is the 50/30/20 rule?

• A budgeting rule that allocates 50% of income to savings, 30% to wants, and 20% to needs

• A budgeting rule that allocates 50% of income to needs, 30% to savings, and 20% to wants

• A budgeting rule that allocates 50% of income to wants, 30% to needs, and 20% to savings

• A budgeting rule that allocates 50% of income to savings, 30% to needs, and 20% to wants

What is passive income?

• Income earned from a job

• Income earned from investments

• Income earned from borrowing money

• Income earned from selling assets