What is a key benefit of creating an emergency fund?

"To ensure you always have cash on hand" "To cover unexpected expenses and mitigate financial risks" "To have funds readily available for investment opportunities" "To maintain a high credit score"

According to the 50/30/20 rule, what percentage of your earnings should be allocated for necessities like housing and transportation?

"20%" "30%" "50%" "70%"

Why is diversifying investments important?

"To maximize returns in a single financial instrument" "To guarantee a profit in all investments" "To spread risk across different asset classes" "To avoid the need for an emergency fund"

What is a potential consequence of relying heavily on credit card purchases?

"Increased savings due to cashback rewards" "Lower interest rates compared to other forms of debt" "Accumulation of debt and potential impact on credit score" "Improved credit score due to frequent credit utilization"

What is a recommended approach to managing entertainment expenses?

"Avoid entertainment expenses altogether to save money" "Spend freely on entertainment without setting a budget" "Set a realistic entertainment budget and stick to it" "Allocate a large portion of your income to entertainment"