Money Basics: Checkpoint 1

Covers what money is for, budgeting, and building a saving habit.

Five questions on the first three lessons: what money does, the 50/30/20 rule, and building a saving habit.

Question 1 of 5 Which of the following is NOT one of the three jobs money does?

Medium of exchange Unit of account Store of value Source of interest

Money's three jobs are medium of exchange, unit of account, and store of value. Earning interest is something money can do, not one of its defining jobs.

Question 2 of 5 In the 50/30/20 rule, what does the 20% go toward?

Wants Needs Savings and debt repayment Taxes

Question 3 of 5 What is the main idea behind 'paying yourself first'?

Spend on wants before needs Move money to savings before spending the rest Pay off all debt before saving anything Always save exactly 20%

Question 4 of 5 'Opportunity cost' refers to:

The price printed on a product The value of the next-best thing you gave up A hidden bank fee The cost of borrowing money

Question 5 of 5 Why does automating savings transfers help build a saving habit?

It earns a higher interest rate automatically It removes the need to rely on willpower each time It's required by most banks It avoids taxes on savings

Automation makes the saving decision once instead of requiring it to be repeated - and won by willpower - every single payday.

← Back to Saving vs Spending: Building the Habit Next lesson → Setting SMART Financial Goals

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