Question

6 the first priority in your monthly spending should be which of the following?

buying an item you have been saving for
adding to your savings
paying bills
splurging on a vacation

Explanation:

Identify the core financial principle

Using the Pay Yourself First and Budgeting Principles knowledge points

The concept of "paying yourself first" dictates that saving should be the very first priority when budgeting monthly income, before paying bills or making other purchases.

Evaluate the options

Using the Budgeting Principles knowledge point

• Buying an item you have been saving for: This is a discretionary expense, not the first priority.
• Adding to your savings: This aligns with the "pay yourself first" rule, making savings the top priority.
• Paying bills: While essential, standard financial planning prioritizes saving first to ensure long-term security.
• Splurging on a vacation: This is a non-essential luxury.

Answer:

• Buying an item you have been saving for
• Adding to your savings (Correct answer)
• Paying bills
• Splurging on a vacation