Personal Finance Courses: Budgeting

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Choose wisely. There is only one correct answer to each question.

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1.
You should avoid spending money on wants.
Choose wisely. There is only one correct answer.
False. Wants are okay to spend money on and may be items that we allow ourselves to pay for as a reward for hard work and saving. The key is to ensure you are not forgoing spending money on or saving for other needs not taken care of yet. In other words, what is the opportunity cost of paying for your want?
2.
Making a decision to purchase something based on your wants is less expensive than basing it on your needs.
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False. Wants are generally more expensive. You may need to buy a pair of jeans, and may want a $150 pair of designer jeans but you only need jeans that cost under $40.
3.
Any past debts you are paying on should be grouped under your expenses in your budget, even though you did not incur them this month.
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True. Even though your debts are ghosts of past expenses, you would include them among your current expenses in your budget.
4.
If you are using an online budgeting tool that is linked to your financial accounts, reviewing how your information is securely maintained is important.
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True. Ensuring you are dealing with a known company that describes how they keep your information secure and private is critical. Make sure the URL starts with 'https' instead of 'http' and look for the site to have a green address bar and lock icon.
5.
If your expenses are less than your income, the resulting difference can be called your savings.
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True. The money left over is savings, which you can use to help you reach your future financial goals.