personal finance final
When completing a 1040, you need...
A W-2 form for every job you held in the past year
Which of the following individuals or groups would be the LEAST likely to look at your credit score?
A bank representative who is helping you open a savings account
FDIC insurance provides...
A guarantee that your money in your checking account, up to $250,000, is safe and available to you
You are developing a savings plan and using short-, medium-, and long-term goals to motivate you. Which represents possible goals from short-term to long-term? Save for...
A new cell phone, college tuition, a house down payment
Which statement best describes a Schumer box?
A standardized way of presenting the key terms of your credit card agreement
If you are trying to protect your checking account information, it is dangerous to...
Carry the PIN number for your debit card with you in your purse, wallet, or backpack.
Your teacher tells you about the importance of checking your credit report. Which government-run website allows you to download your credit report for free on an annual basis?
annualcreditreport.com
Fill in the blanks: Direct deposit typically refers to your ___________ sending your _______ electronically to your bank account.
employer, paycheck
What is meant by the phrase "Keeping up with the Joneses"?
the human behavior of wanting to spend more because we see others around us spending more and enjoying goods and services that we think we would enjoy as well.
If you cannot make a tax payment in full, what is the BEST next step to take?
Contact the IRS to see if there is a payment plan that works for you.
Which of the following is likely to INCREASE your monthly payment?
Decreasing the number of months in your term
What does "Pay Yourself First" mean when it comes to saving?
Each time you get paid, set aside money for savings before making any purchases
It's time for Roxanne to start repaying her student loans, which are amortized over the next ten years. Her first month's payment due is $396. How much should she expect to pay next month?
Exactly $396
All of these are key questions teens can ask themselves before borrowing money EXCEPT:
Is it the same as my friends?
How does increasing the size of your down payment impact your auto loan?
It decreases the size of your principal and decreases the total cost of the loan
Which of the following statements about the W-2 form is TRUE?
It identifies how much was withheld in taxes.
All of the following statements about using tax filing software are true EXCEPT...
It is best to use if you have a major life event, such as marriage, divorce, buying or selling a house.
You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?
It is deducted directly from your checking account
Which of these statements about saving is INCORRECT?
It is extremely difficult to open a savings account, as you typically need at least $10,000 for your initial deposit.
What does the term "withholding" mean in reference to your paycheck?
It is how much is being taken out of your paycheck in taxes.
Fill in both blanks with the correct terms: A _________ percentage of young people have debt than older generations, while their debt amounts tend to be ________.
Larger, lower
Which person-to-person payment activity will likely result in your paying a fee?
Linking P2P to your credit card
Why might someone consider choosing a loan with the lowest monthly payment?
Low payments fit better in their monthly budget
If you are filing taxes for your 2020 income, the due date for filing would be...
April 2021
Each of the following is a convenience of online banking EXCEPT...
Avoid the service charge associated with doing your banking in person at a bank branch
Each of the following is an example of an amortized loan EXCEPT...
Apartment rent
Tim is considering buying a $30,000 car. Which of these financing options will likely lead to the LOWEST monthly payment?
$3,000 down payment, 6% interest, 84 months
Allie earns $13.25/hour. She works 40 hours/week. $90.72 is deducted each week. What's her net pay?
$439.28
If your credit card limit is $800 and your outstanding balance is $725, what is the largest amount you can charge on that card in the upcoming month?
$75
What is the highest, realistic interest rate you could be offered by a savings account this year?
2%
What is a good "rule of thumb" for how much you should save?
20% of income
What is a good approximate amount to have in your emergency fund?
3-6 months of expenses
Joelle wants to have an emergency fund to cover 6 months of her expenses. Her monthly gross pay is $4,000 and her monthly expenses are $2,000. If she plans to save 10% of her gross pay each month, how long will it take her to build her emergency fund?
30 months
How do you distribute your money when using the 50-20-30 rule?
50% should be used for fixed/essential expenses, 20% for savings, and 30% for flexible expenses.
All of the following are ways that you as a teen or young adult can improve your credit score EXCEPT...
Apply for multiple credit cards in a short amount of time so that you can show you're good at managing multiple lines of credit quickly
Which term from your bank statement represents the amount of money you have in your account at a given point?
Balance
Which item is NOT provided on a credit report?
Balance from your bank accounts
What is the best advice to prevent identity theft?
Be careful with your credit and bank account numbers, create strong passwords, and beware of phishing emails.
Each of the following represents an installment loan EXCEPT...
Credit card
What is an overdraft fee?
Fee for withdrawing more money than you have in your account
Heather receives a phone call, in which an automated voice states that her credit card has been used fraudulently and that she must enter her 16-digit credit card number, using the keypad of her phone, to clear up the error. What should Heather do next?
Hang up and call her credit card company using the 1-800 number on the back of her card to inquire about the issue or report the attempted phone fraud.
Tori has $75 in her checking account and swipes her debit card for a $90 purchase at Target. She has overdraft protection. What most likely happens?
Her purchase is approved, but she pays an overdraft fee
Currently, digital wallets can be used for all of the following EXCEPT...
Holding government ID like a passport or driver's license
Which form do you use to prove that you are eligible to work in the U.S.?
I-9
When developing a savings plan, what is TRUE about saving and inflation?
In order to not lose purchasing power over time, the rate of return for saving should be at least as high as the rate of inflation.
Why is it so important for your credit report to be completely accurate?
If there is an error on your credit report, you are more likely to have higher interest rates or even get rejected for the loan altogether.
Which of the following does the Federal government spend a LARGE portion of taxpayer money on?
Military
An account similar to a traditional savings account but that typically pays higher interest, requires a higher minimum balance, and may allow check writing.
Money Market Account
In the early repayment phase of an amortized loan, your monthly payment is...
Mostly interest and a little principal
What is the key difference between Net Pay and Gross Pay?
Net pay is the total amount of money you get AFTER taxes are deducted.
Which word represents the total cost of the item you're purchasing on credit minus any down payment you make upfront?
Principal
FDIC Insurance is...
Protection for bank customers' deposits up to $250,000, guaranteeing their money is still available if the bank goes out of business.
Which statement regarding online bill pay is accurate?
Online bill pay can be used for one-time payments as well as recurring payments
Assuming you have a Free Student Checking Account, which fee would you end up having to Pay?
Overdraft Fee
Which of the following is TRUE about owning a share of stock?
Owning a share means you own a percentage of the company.
If you buy a $1000 bicycle, which credit card payoff strategy will result in your paying the LEAST?
Pay $250 per month until it's paid off
All of the following are ways to get out of debt faster except:
Pay only the minimum balance on credit cards.
Rather than the borrower paying a small rate of interest in each billing cycle like with a credit card, the borrower using a payday loan...
Pays a fee when they first receive the loan and must repay it to extend.
The most important section of your credit report is your trade lines, which includes the details about each of your credit accounts. All of the pieces information provided below can found in this section EXCEPT...
Possible solutions to budget out repayment of the loan
Why might it be DISADVANTAGEOUS to receive a large refund instead of a smaller one?
Receiving a large refund means you were OVERWITHHOLDING from each paycheck, and that's money you could have used throughout the year for other things.
The following statements accurately describe the difference between saving and investing EXCEPT...
Saving can only be done in person. Investing can be done both in person and online.
Each of these is a way to get money INTO your checking account EXCEPT...
Send cash in the mail to the bank
Jessie did not meet the minimum income requirement to file a tax return. What is one reason for why she should file a tax return anyway?
She could potentially get a refund for the taxes that were withheld from her paycheck.
Allison is looking to buy a new car but has a low credit score. Which of the following statements is FALSE?
She is more likely to get a loan with a low interest rate
How is compound interest different from simple interest?
Simple interest is when interest is paid on the principal amount only. Compound interest is when interest is paid on the principal amount and on the interest already earned.
What does it mean to "diversify" your portfolio?
Spreading risk by investing your money in a variety of funds and investment options.
How do stocks and bonds differ?
Stocks are good for income while bonds are good for long-term growth
Who has to file a tax return?
Sumika - she earned $12,400 over the past year at her internship.
Which of these represents the WORST negotiating tactic you can use when purchasing a vehicle?
Tell the salesperson the maximum amount you can afford per month
Why is it important to be extremely careful when completing your 1040 form?
The 1040 form determines whether you owe additional taxes or are entitled to receive a refund from the government
Why should teenagers, in particular, look for no fee savings accounts?
The amount of fees a bank charges is likely to be greater than the interest a bank would pay on a teenagers' balance as they are first starting to save in a savings account.
Why is it a good idea to set up mobile alerts for your checking account?
The warnings might alert you in time to prevent your making costly mistakes
Why do lenders request to look at your credit report before you can borrow money?
They want to see how responsible you are in making payments on existing debt
Three of these statements best describe a checking account. Which statement best describes a savings account?
This account pays you interest on money you have put away for later to help your money grow.
Ben just received his first paycheck in the mail. All of the following are deductions he should expect to see EXCEPT...
United Way
When it comes to transferring money, what does it mean to "authenticate" the transaction?
Use a PIN, your fingerprint, or face ID to prove it's you
Each of the following represents a good habit if you're trying to prevent ID theft EXCEPT...
Using ONE very secure password for all of your major financial accounts
Which of the following statements about "vesting periods" is TRUE?
Vesting periods can be used as a way to retain employees for a longer period of time.
When do you start paying taxes?
When you make more than the minimum income requirement
All of the following are factors that affect your credit score EXCEPT...
Whether your credit is with Visa or Mastercard
Which of the following statements comparing credit and debit cards is TRUE?
With debit cards, you're spending your own money at point of sale, while with credit cards, you're promising to pay back the money eventually
Which of the following actions will likely DECREASE your credit score?
You are 3 months late paying your student loan bill
Your friend Laila is talking to you about the benefits of tax filing software. Which of the following is true?
You can avoid the costs of having to pay a professional, though you may have to pay for the software and/or e-filing online.
What is one main difference between a 401(k) and a Roth IRA?
You contribute pre-tax money to a 401(k) and post-tax money to a Roth IRA.
If you are a dependent, which of the following is TRUE about filing your taxes?
You fill out your own 1040 form and receive a refund or are responsible for paying any taxes you owe.
Which of the following statements about the W-4 form is FALSE?
You get the form in the mail a few months before you file your taxes.
What does it mean to have "prime credit"?
You have a credit score of 720 or above
What does it mean to set up an "automatic deposit"?
You set up an amount of your paycheck to be deposited into an account automatically.
Identity errors, incorrect account details, and fraudulent accounts are the most common credit report errors. What should you do if you find errors?
You should dispute the error with a credit agency or with a bank/lender and locate any receipts or other written proof that the data is not correct.
What is a "thin file"?
Your credit history is little to none, which makes it difficult to obtain credit moving forward.
Which of the following is most likely to represent a fixed rate, secured debt?
a dealer-financed auto loan
