Women and Personal Finance Quiz
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Questions and Answers

What is the primary purpose of creating a budget?

  • To prepare for unexpected financial loss
  • To increase overall expenditure
  • To maximize savings only
  • To control cash inflows and outflows (correct)

    • What should be included when preparing a cash budget?

  • Estimating discretionary spending only
  • Calculating anticipated after-tax income (correct)
  • Reviewing only fixed expenses
  • Identifying variable expenditures exclusively

    • Which method can help limit restaurant expenditures according to the envelope system?

  • Setting aside cash in an envelope for the budgeted amount (correct)
  • Tracking all expenses through mobile apps
  • Using a credit card for unlimited spending
  • Reducing overall income to match spending

    • Which of the following is NOT a recommended practice when choosing a professional financial planner?

    <p>Rely solely on the planner's suggestions</p> Signup and view all the answers

    How do fee-only planners earn their income?

    <p>By charging fees for their services</p> Signup and view all the answers

    What does a balance sheet primarily help to calculate?

    <p>Level of net worth or wealth</p> Signup and view all the answers

    Which aspect is NOT crucial while analyzing financial health through ratios?

    <p>Understanding market trends</p> Signup and view all the answers

    In record-keeping to track expenses and income, what is the main goal?

    <p>To have a detailed account of all transactions</p> Signup and view all the answers

    What is one of the basic steps in personal financial planning?

    <p>Set specific financial goals</p> Signup and view all the answers

    What are monetary assets primarily considered?

    <p>Liquid assets such as cash and savings accounts</p> Signup and view all the answers

    Which of the following is an example of a liability?

    <p>Mortgage payment due next month</p> Signup and view all the answers

    Why is it important to have an emergency fund?

    <p>To protect against unforeseen financial challenges</p> Signup and view all the answers

    What does a balance sheet primarily provide?

    <p>A snapshot of financial position at a given date</p> Signup and view all the answers

    Which type of asset is considered when calculating wealth for retirement planning?

    <p>Retirement plans such as pension plans</p> Signup and view all the answers

    What is meant by ‘current debt’ in personal finance?

    <p>Obligations that must be settled within the next year</p> Signup and view all the answers

    How does increased education about investments benefit individuals?

    <p>It often leads to higher earning potential</p> Signup and view all the answers

    What does Non-Life Insurance primarily cover?

    <p>Property and liability risks</p> Signup and view all the answers

    Which of the following is NOT a benefit of Life Insurance?

    <p>Gaining interest on savings</p> Signup and view all the answers

    What type of Life Insurance policy provides periodic returns?

    <p>Endowment Plan</p> Signup and view all the answers

    Which term refers to the amount guaranteed to be paid upon the insured's death?

    <p>Sum Assured</p> Signup and view all the answers

    What is one of the main purposes of a Child’s Plan insurance policy?

    <p>To fulfill the child’s life goals</p> Signup and view all the answers

    Which of the following is a characteristic of Unit Linked Insurance Plans (ULIPs)?

    <p>Insurance plus investment opportunities</p> Signup and view all the answers

    What is a typical feature of the Grace Period in an insurance policy?

    <p>It provides extra time to pay premiums without losing coverage</p> Signup and view all the answers

    What is the maximum rebate limit mentioned?

    <p>Rs. 2,500</p> Signup and view all the answers

    What differentiates a Whole Life Insurance policy from other types?

    <p>It provides coverage for the insured’s entire life</p> Signup and view all the answers

    What is the first step in filing your income tax return electronically?

    <p>Create your login on the e-filing portal</p> Signup and view all the answers

    Which documents are recommended for salaried individuals when filing ITR online?

    <p>Form 16 and Form 26AS</p> Signup and view all the answers

    What is advised to assign to your ITR for easier processing?

    <p>Aadhaar Number</p> Signup and view all the answers

    What is one of the learning objectives related to cash management?

    <p>Manage your cash and understand why you need liquid assets</p> Signup and view all the answers

    Which service can you engage for help with filing your income tax return?

    <p>Tax Return Preparers (TRPs)</p> Signup and view all the answers

    Which of the following is a cash management alternative you should compare?

    <p>Interest rates on savings accounts</p> Signup and view all the answers

    What is one of the key components of personal financial planning relating to taxes?

    <p>Calculating taxable income and the amount owed for income tax</p> Signup and view all the answers

    What is one of the main costs associated with open credit, specifically credit cards?

    <p>Interest rate</p> Signup and view all the answers

    Which aspect is NOT considered when calculating creditworthiness?

    <p>Personal relationship quality</p> Signup and view all the answers

    What should be the first step in making smart buying decisions?

    <p>Differentiate want from need</p> Signup and view all the answers

    Which of the following is a sign of trouble with credit card spending?

    <p>Persistent calls from debt collectors</p> Signup and view all the answers

    Which situation can negatively affect your credit score?

    <p>Applying for new credit multiple times in a short period</p> Signup and view all the answers

    What is an effective way to protect against credit card fraud?

    <p>Monitoring statements regularly</p> Signup and view all the answers

    When considering the purchase of a home, which of the following should you calculate?

    <p>Total costs of buying a home</p> Signup and view all the answers

    What should be done before making a purchase to get the best price?

    <p>Conduct research</p> Signup and view all the answers

    Study Notes

    Women and Personal Finance

    • Taking charge of personal finances is crucial for women to secure their financial future.
    • Knowledge acquisition is essential to make informed financial decisions and create actionable plans.
    • Consulting a financial planner can help address specific financial concerns.

    COVID-19 Impact on Finances

    • The pandemic has heightened the need for effective personal financial management during emergencies.
    • Understanding personal financial planning is vital for managing finances and achieving goals.

    Key Steps in Personal Financial Planning

    • Establish clear financial goals to guide the creation of a financial plan.
    • An emergency fund is critical for protection against economic downturns.
    • A more informed perspective on investments can lead to higher earnings.
    • Familiarity with ten fundamental principles is foundational for financial planning.

    Measuring Financial Health

    • The balance sheet reflects one's financial position, detailing assets, liabilities, and net worth.
    • Assets include monetary assets (cash, savings), investments (stocks, mutual funds), retirement plans, housing, automobiles, and personal property.
    • Liabilities encompass current debts due within a year, such as unpaid bills and rent.

    Budgeting and Cash Management

    • A budget is essential for managing cash inflows and outflows, aligning income with expenditures.
    • Preparing a cash budget involves reviewing past income, estimating taxes, and identifying fixed/variable expenses.
    • The envelope system can help manage spending, such as setting aside a specific amount for dining.

    Financial Planner Engagement

    • Financial planners can either be consulted for guidance or comprehensive management of financial affairs.
    • It is important to assess a planner's credentials, experience, and fee structures (fee-only or fee and commission).

    Importance of Understanding Time Value of Money

    • Compounding allows money to grow over time, emphasizing the importance of interest rates.
    • Present value calculations help quantify future money's worth.

    Income Tax Management

    • Filing income tax returns electronically is straightforward, requiring PAN card and Aadhar numbers.
    • It's beneficial to use Form 16 for salaried individuals when filing taxes online.

    Tax-Planning Strategies

    • Understanding and managing taxable income is vital for personal financial planning.
    • Choosing appropriate tax-saving instruments can significantly reduce tax liability.

    Cash and Liquid Asset Management

    • Liquid assets are important for financial stability; understanding cash management options is key.
    • Comparison of rates and services from different financial institutions helps in effective cash management.

    Credit Management

    • Credit cards are a major form of open credit, requiring cautious spending to avoid debt accumulation.
    • Each type of credit card has different costs and rates; managing credit responsibly prevents financial trouble.

    Smart Buying Practices

    • Distinguishing between wants and needs is crucial for making informed purchasing decisions.
    • Researching products and negotiation are essential steps in smart buying.

    Insurance Categories

    • Insurance is classified into Life and Non-Life (General) insurance.
    • Life insurance is important for income replacement, debt repayment, educational expenses, retirement savings, and tax benefits.

    Types of Life Insurance Policies

    • Policies vary, including Term Plans, Unit Linked Insurance Plans (ULIPs), Endowment Plans, Money Back Plans, Whole Life Insurance, Child’s Plans, and Retirement Plans.
    • Each type serves different financial goals and offers varying levels of investment opportunity.

    Choosing a Life Insurance Provider

    • Selecting the right insurance provider should align with personal financial goals and needs.

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    Description

    This quiz focuses on essential personal finance strategies for women, especially in the context of recent economic challenges like the COVID-19 pandemic. Test your knowledge on key steps in financial planning, emergency funds, and principles of measuring financial health to secure your financial future.

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