DECA Hospitality Services Team Decision Making Practice Exam

Which of the following is a benefit of tracking personal expenses?

1. It allows for frequent impulse purchases

2. It helps in achieving financial goals

3. It causes anxiety over spending

4. It increases debt accumulation

The correct answer is: It helps in achieving financial goals

Tracking personal expenses is highly beneficial as it helps individuals manage their finances more effectively, leading to the achievement of financial goals. By keeping a close eye on where money is being spent, individuals can identify patterns and areas where they might be overspending. This awareness enables them to make informed decisions about budgeting and saving, ultimately supporting their financial ambitions, whether that includes saving for a vacation, paying off debt, or building an emergency fund. The other options do not align with the positive outcomes of tracking personal expenses. Frequent impulse purchases are typically discouraged as they can detract from financial goals. Anxiety over spending can be a result of not tracking expenses, as a lack of awareness can lead to unnecessary stress about finances. Lastly, tracking expenses generally aims to reduce debt accumulation, not increase it, by promoting better spending habits and financial discipline.