12 Questions
What is the primary purpose of a financial plan?
To set short-term and long-term financial goals
Which of the following is NOT a category typically included in a personal budget?
Vacation
Which of the following is an example of a fixed budget category?
Rent
What is the purpose of building and maintaining a healthy credit rating?
To qualify for better credit terms and interest rates
Which type of credit is typically considered the most risky for borrowers?
Payday/predatory lenders
What is the primary purpose of a budget that follows the 70-20-10 rule?
To allocate funds for spending, savings, and charitable contributions
What is the purpose of a co-signer when applying for a loan?
To act as a backup borrower if the primary borrower defaults
What is the primary factor that lenders consider when qualifying a borrower for a home mortgage?
The borrower's debt-to-income ratio
What is the main advantage of a 529 plan when saving for college?
The tax-deferred growth of investments within the plan
Which of the following is a common warning sign of credit abuse on a credit report?
All of the above
What is the main purpose of the FAFSA (Free Application for Federal Student Aid)?
All of the above
Which of the following is a common circumstance that can lead to personal bankruptcy?
Uninsured medical costs
This quiz focuses on identifying and explaining the process of budgeting based on projected income and expenses. It covers defining the elements of a financial plan, benefits of financial planning, setting short- and long-term financial goals, developing a budget with different categories, and understanding fixed, variable, and periodic budget categories.
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