Personal Finance Quiz 1 Midterm

Which of the following best defines financial success?

• Accumulating as much wealth as possible

• Balancing financial goals with personal happiness

• Earning a high income

• Living a frugal lifestyle

What is the first step in achieving financial freedom?

• Investing in the stock market

• Creating a financial plan

• Eliminating all debt

• Setting financial goals

Which of the following is NOT considered a building block for financial success?

• Proper budgeting

• Adequate insurance coverage

• Winning the lottery

• Strategic investments

The financial planning process begins with:

• Developing a plan of action

• Evaluating current finances

• Setting measurable financial goals

• Monitoring and reassessing the plan

What is a key characteristic of financial happiness?

• Avoiding all forms of debt

• Living below your means

• Aligning spending with personal values

• Having multiple income sources

Financial values primarily influence:

• Investment decisions

• Spending and saving habits

• Tax obligations

• Employment choices

SMART goals in financial planning refer to goals that are:

• Simple, Measurable, Achievable, Realistic, Time-bound

• Specific, Manageable, Accurate, Reliable, Timely

• Specific, Measurable, Achievable, Relevant, Time-bound

• Strategic, Meaningful, Attainable, Rational, Targeted

Which of the following is NOT a financial goal?

• Saving for retirement

• Buying a house

• Improving communication skills

• Reducing credit card debt

What is the purpose of setting financial strategies?

• To outline steps to achieve financial goals

• To reduce taxable income

• To increase creditworthiness

• To monitor economic trends

The personal balance sheet shows:

• Monthly income and expenses

• Assets, liabilities, and net worth

• Investment performance over time

• Taxable income for the year