International Baccalaureate (IB) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Study International Baccalaureate Exams with tailored multiple choice quizzes and flashcards. Gain confidence with explanations and hints for every question. Ace your exams!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

Saving a percentage of your income each month is an example of what financial strategy?

Reactive spending
Proactive savings
Complicated investing
Wasting money

The correct answer is: Proactive savings

Saving a percentage of your income each month exemplifies proactive savings because it involves a deliberate and forward-thinking approach to managing your finances. This strategy emphasizes the importance of setting aside funds before expenses are incurred, allowing for better financial planning and the ability to build wealth over time. By prioritizing savings, individuals can prepare for future needs, emergencies, and investments, thereby taking control of their financial health. Proactive savings contrasts with other approaches that may lack forethought or are often response-driven, such as reactive spending, which can lead to financial instability and unplanned expenditures. Saving regularly also counters the notion of wasting money, as it allocates funds towards future goals rather than overspending on unnecessary items. Unlike complicated investing, which involves higher levels of risk and financial knowledge, proactive savings focuses on the straightforward act of setting aside money, making it an accessible strategy for everyone.