ECONOMICS
BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The government takes what you don’t save.
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You will find that you spend more time daydreaming instead of working.
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The bank requires you to save a certain amount of money.
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If we don’t plan for savings first, it usually doesn’t happen.
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Detailed explanation-1: -The idea is to ‘pay yourself’ your savings at the beginning of each month before you spend on your monthly expenses. This way, you plan not only for the present but also for the future. After you have set aside your savings, you can prioritise and adjust your expenses to fit within the rest of your income.
Detailed explanation-2: -If you make a habit of depositing or moving money into your savings account every time you are paid, you may be less likely to spend it on your everyday expenses. This practice can help you foster a habit of saving that will add up over time and help you be prepared for large or unexpected expenses.
Detailed explanation-3: -The “pay yourself first” method has you put a portion of your paycheck into your savings, retirement, emergency or other goal-based savings accounts before you do anything else with it. After a month or two, you likely won’t even notice this sum is “gone” from your budget.
Detailed explanation-4: -Savings accounts are designed to hold money that you don’t plan to spend right away. You can use them to save for short-term goals or long-term goals and most savings accounts pay interest on deposits, helping you to grow your money.
Detailed explanation-5: -Saving provides a safety net and a way to achieve short-term goals, while investing has the potential for higher long-term returns and can help achieve long-term financial goals. However, investing also comes with the risk of losing money.