Personal Finance exam
What is the risk of not having insurance?
Fully responsible of paying a whole lot of of money out of pocket
What are some options when trying to pay for higher education? Which ones are "free" and which ones do you have to pay back?
Grants and scholarships- Free Loans- payback
Why is it important to know the difference between gross pay and net pay when calculating your budget?
Gross pay is before tax and deduction were taken out. So, you'll be thinking you have more money then you really do, meaning you'll run out of money
Savings
Money that is set aside with the plan to not spend it for a long time
Interest
The fee someone pays to borrow money
FAFSA
The main form students use to apply for federal education grants and loans
Expenses
The money spent on something
Unit Price
The price for a single unit of measure of a product sold in more or less than the single unit
Why is it dangerous to only pay the minimum payment on your credit card balance?
You'll be charged interest
Net pay is NOT ________.
Your gross pay plus any bonuses.
When setting a budget, you should consider...
a) financial goals, current expenses, and income.
Why should you purchase insurance?
a. To prevent financial burden in the case of an accident, theft, or another event
Making a good purchasing decision requires __________.
a. comparing the prices of similar items b. reading reviews of the product c. waiting until the product is on sale, if possible
When filing an insurance claim,the policyholder must pay a ________________, which is the amount you owe before insurance will cover the rest of the bill.
deductible
Bank Teller
A bank employee who helps with account transactions, like depositing or withdrawing money
Insurance
A means of protection from financial loss
Budget
A plan for how you will spend the money that you make or receive
Deductible
A specified amount of money that the insurance policyholder must pay before an insurance company will pay a claim
Social Security Tax
A tax that pays benefits for people who have retired, disabled people, and dependents of workers who have died
Checking Account
A type of bank account that allows withdrawals and deposits of your money
Health Insurance
A type of insurance that covers the cost of medical expenses
Loan
An amount that is borrowed to be paid back at a later date, usually with added interest
ATM
Automatic Teller Machine
Which type of bank account is best for everyday transactions?
Checking Account
Which type of bank account typically offers the least (if any) interest?
Checking account
Co-sign
Signing a lease or a loan along with another person in order to help guarantee that the lease or loan will be paid
Premium
The cost of having Insurance
Direct Deposit
The electronic transfer of money directly into your bank account
Net Pay
Total amount of money earned after taxes and deductions are taken out of your paychecks
Generally, the more education you receive, the higher your lifetime earnings will be.
True
Explain the difference between a W-4 and a W-2 form.
W-4 hold out an amount of taxes and deductions from paycheck. W-2 receive in the mail in January
Withdraw
When money is taken out of a bank account
Proximity Principle
When you surround yourself with the right people in the right places to get where you want to go
Which of the following should NOT be considered when setting a current budget?
b) Future income
Which of these items is NOT important to consider when selecting a credit card?
b) The look of the credit card
Which is NOT considered an additional cost beyond tuition for higher education?
b. Academic counseling
Which is not an example of a risk management strategy?
b. Buying a new car
Living at home could save you money while enrolled in post secondary school or training because...
b. it reduces costs of room and board.
Insurance that will pay for injury to another driver and/or damage to their car if you are in an accident is called...
b. liability insurance.
What will happen to your credit score if you do not manage your debt wisely?
c) Your credit score will go down
What is the best reason for why someone would want to lease a house instead of buy one?
c. They are planning on living there for a short period of time.
Everyone interested in post secondary education should complete the Free Application for Federal Student Aid (FAFSA) because...
c. it allows you to be eligible for federal student aid and other scholarships and grants.
Which of the following is NOT a possible tax or deduction that could show up on your paycheck?
d) Sales tax
When you start a new job, you fill out a W-4 form to _________.
d) to determine how much federal income tax your employer should withhold from your paychecks.
Which payment option could have interest charged to you?
d. Credit Card