International Baccalaureate (IB) Practice Exam

Which financial action is commonly recommended for college students?

1. Living beyond their means

2. Creating a savings plan

3. Relying solely on loans

4. Only working summer jobs

The correct answer is: Creating a savings plan

Creating a savings plan is widely recommended for college students because it encourages responsible financial management and promotes long-term financial health. By developing a savings plan, students can prioritize their expenses, allocate funds for necessities, and set aside money for emergencies or future goals. This approach fosters good financial habits, which can assist students in avoiding debt and living within their means. Having a savings plan can empower students to make informed choices about spending and investing for their future, ensuring they are better prepared for unexpected expenses or events that may arise during their college years or after graduation. Building savings also provides a sense of security and can reduce reliance on credit, contributing to a more stable financial situation.