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Prioritizing Financial Freedom

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Questions and Answers

What is the primary benefit of consolidating debt?

Reducing the total amount of debt owed
Increasing credit scores
Simplifying debt payments into a single payment (correct)
Decreasing the interest rate on debt

What is the debt avalanche method of paying off debt?

Paying off the debt with the lowest balance first
Paying off the debt with the highest interest rate first (correct)
Paying off debt by using the snowball method
Paying off debt by transferring it to a credit card with a higher interest rate

Why is having a side gig important in achieving financial wellbeing?

It reduces expenses and increases debt
It provides a secondary source of income for luxury purchases
It helps to increase credit scores
It ensures financial stability in case of job loss or other financial emergencies (correct)

What is the key to achieving financial freedom, according to the text?

Prioritizing what truly matters to you (C) Signup and view all the answers

What is the primary reason for reducing expenses in building wealth?

To execute a key component of building wealth (A) Signup and view all the answers

What is the potential drawback of not consolidating debt?

Having to track multiple payment dates and debt balances (B) Signup and view all the answers

What is the percentage of income that should be saved according to the Six Laws of Wealth?

20% (C) Signup and view all the answers

What is the primary reason for adopting fiscal discipline according to the tips for getting out of debt?

To control your spending habits (D) Signup and view all the answers

Which of the following is a recommended strategy for getting out of debt in your 20s and 30s?

Directing your cash towards eliminating debt as much as possible (C) Signup and view all the answers

What is the main reason for investing in yourself according to the Six Laws of Wealth?

To gain knowledge and skills to increase your earning power (A) Signup and view all the answers

Which of the following is a recommended tip for saving money from the 'Pinaka' Show?

Magbaon (bringing your own food) (D) Signup and view all the answers

What is the primary purpose of setting aside a portion of your income according to the 10 Saving Tips?

To build an emergency fund (A) Signup and view all the answers

What is the main advantage of reducing expenses when earning a small income?

It makes a bigger impact on your finances compared to increasing income (D) Signup and view all the answers

What is the purpose of having a financial freedom fund?

To reduce your dependence on your primary income source (A) Signup and view all the answers

What is the benefit of seeking professional help for managing your finances?

It will help you navigate various programs and consolidation options (A) Signup and view all the answers

Why is it important to have at least one credit account?

To start building a credit history (C) Signup and view all the answers

What is the recommended approach to managing your credit account?

Immediately pay your purchases on it without carrying a balance (C) Signup and view all the answers

What is the relationship between a good credit score and saving money?

A good credit score will actually save you money in the long run (A) Signup and view all the answers

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