RAMSEY CHAPTER 2 (L1-L3)

What is the main purpose of creating a budget according to the text?

• To control spending on entertainment only

• To ensure you can buy luxury items

• To manage your income and control your financial plan

• To spend all your income before the month ends

According to the text, what can be a consequence of not having a budget?

• You can always buy everything you want

• You might run out of money before getting essential items

• You will save more money

• You will not need to plan for any expenses

What is a budget defined as in the key terms?

• A list of expensive items to purchase

• A written plan for giving, saving, and spending

• A method to increase your income

• A plan for investment only

What is the primary purpose of a budget according to the text?

• To control the government's spending

• To plan how you spend your money

• To increase your income

• To calculate your taxes

According to the text, what does a good budget help you understand?

• How to avoid taxes

• Where your money comes from and where it goes

• How to invest in stocks

• The best ways to save money in banks

What percentage of Americans think budgeting is important?

• 35%

• 50%

• 95%

• 75%

What is the primary purpose of creating a budget according to the text?

• To limit the amount of money one can spend

• To control spending and know what you can afford

• To complicate financial decisions

• To avoid spending money on entertainment

According to the text, what percentage of personal finance is considered behavior?

• 20%

• 50%

• 80%

• 100%

What does the text suggest about the relationship between budgeting and freedom?

• Budgeting restricts freedom completely

• Budgeting has no impact on freedom

• Budgeting enhances freedom by allowing controlled spending

• Budgeting only benefits financial experts

What percentage of students who have taken a personal finance course report higher confidence in budgeting compared to those who did not take the course?

• 95%

• 87%

• 94%

• 33%