Recent Lessons

Show all results for ""

Budgeting Process and Financial Planning Elements

12 Questions

0 Views

Budgeting Process and Financial Planning Elements

Choose a study mode

Play Quiz

Study Flashcards

Spaced Repetition

Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the primary purpose of a financial plan?

To track daily expenses
To maximize investment returns
To set short-term and long-term financial goals (correct)
To minimize taxes

Which of the following is NOT a category typically included in a personal budget?

Investing
Savings
Vacation (correct)
Spending/Debt

Which of the following is an example of a fixed budget category?

Groceries
Dining out
Utilities
Rent (correct)

What is the purpose of building and maintaining a healthy credit rating?

To qualify for better credit terms and interest rates (C) Signup and view all the answers

Which type of credit is typically considered the most risky for borrowers?

Payday/predatory lenders (B) Signup and view all the answers

What is the primary purpose of a budget that follows the 70-20-10 rule?

To allocate funds for spending, savings, and charitable contributions (B) Signup and view all the answers

What is the purpose of a co-signer when applying for a loan?

To act as a backup borrower if the primary borrower defaults (B) Signup and view all the answers

What is the primary factor that lenders consider when qualifying a borrower for a home mortgage?

The borrower's debt-to-income ratio (D) Signup and view all the answers

What is the main advantage of a 529 plan when saving for college?

The tax-deferred growth of investments within the plan (B) Signup and view all the answers

Which of the following is a common warning sign of credit abuse on a credit report?

All of the above (D) Signup and view all the answers

What is the main purpose of the FAFSA (Free Application for Federal Student Aid)?