5.3.3 Financial Literacy

• Budgeting involves creating a plan to manage income and expenses
• Match the component of financial literacy with its example:

  Budgeting ↔️ Monthly expense tracking

  Saving ↔️ Saving for a house down payment

  Investing ↔️ Buying stocks or bonds

  Debt Management ↔️ Paying off credit card balances
• What are the key components of financial literacy?

  Budgeting, saving, investing, debt management
• Financial literacy is essential for building wealth and avoiding overspending.

  True
• What is one key difference between financially literate and non-literate individuals in terms of future planning?

  Long-term savings strategies
• Budgeting involves creating a plan to manage income and expenses.


  True
• What is the purpose of saving in financial literacy?

  For future needs or goals
• Financial literacy is essential for achieving financial goals like buying a home or retiring comfortably
• What is the definition of financial literacy?

  Understand and use financial skills
• What is the purpose of debt management in financial literacy?

  Avoid financial strain
• Financially literate individuals are more likely to achieve their financial goals.


  True
• What is the primary goal of saving in financial literacy?

  Future needs or goals
• Financial literacy helps individuals make informed decisions and plan for their financial future
• Financial literacy enables individuals to manage their personal finances responsibly
• Budgeting involves creating a plan to manage income and expenses
• What does investing involve in financial literacy?

  Allocating money to assets
• Financially literate individuals live paycheck to paycheck with no clear financial plan.

  False
• Financial literacy helps individuals avoid overspending and manage debt effectively.

  True
• What is the primary difference in financial control between literate and non-literate individuals?

  Literate individuals manage finances effectively
• Why is financial literacy considered a crucial skill?

  To take control of personal finances
• What are the key components of financial literacy according to the study material?

  Budgeting, saving, investing, debt management
• What is financial literacy?

  Understanding and using financial skills
• Arrange the components of financial literacy in a logical order of importance:

  1️⃣ Budgeting and Financial Planning

  2️⃣ Saving and Investing

  3️⃣ Debt Management

  4️⃣ Insurance and Protection

  5️⃣ Consumer Rights in Financial Transactions

  6️⃣ Financial Safety and Security
• What does debt management involve?

  Managing loans and credit
• A financially literate individual develops long-term savings and investment strategies
• What do personal finance courses teach?

  Budgeting, saving, investing
• Utilizing financial literacy resources can empower individuals to achieve their financial goals.


  True
• Investing involves allocating money to assets for income or profit
• Financially literate individuals make informed choices based on understanding market trends and personal financial needs
• Financial literacy enables individuals to achieve long-term financial security.


  True
• Financially illiterate individuals are more likely to accumulate high debt.


  True
• Budgeting involves creating a plan to manage income and expenses.


  True
• Budgeting involves creating a plan to manage income and expenses
• Financial literacy includes the ability to manage debt effectively.


  True
• What is one benefit of financial literacy for decision making?

  Informed choices
• How does financial literacy contribute to wealth building?

  Strategic investments
• Online tools and apps help with budgeting and investment tracking
• Saving involves setting aside money for future needs or goals.

  True
• Financial literacy empowers individuals to make informed financial decisions
• Budgeting involves creating a plan to manage income and expenses