Personal Finance Exam Study Guide
What does living paycheck to paycheck mean? Living paycheck to paycheck occurs when a person's income is devoted to expenses, which means that little to no money is put in savings. When a person chooses to not deposit their paycheck, they are living paycheck to paycheck. Living paycheck to paycheck is an expression used to describe a situation when someone eagerly awaits their next paycheck to plan for the month's expenses. Living paycheck to paycheck is an expression used to explain the situation in which a person cannot plan past the next paycheck due to financial and budgeting difficulties caused by outside circumstances.
Living paycheck to paycheck occurs when a person's income is devoted to expenses, which means that little to no money is put in savings.
A savings account is for ___________. Investing your money Regular spending Long-term savings goals The Entertainment budget line item
Long-term savings goals
Certificates of deposit and money market accounts are both examples of investments with __________ risk and __________ return. High; low High; high Low; high Low; low
Low; high
What is one way to practice power over purchase? Use credit cards to earn rewards. Make sure you're sticking to your budget. Make quicker decisions when buying. There's no such thing as power over purchase.
Make sure you're sticking to your budget.
Leasing a car is a method of financing where someone __________________. Never pays any interest or fees Is paying off two or more vehicles at one time Makes monthly payments on but does not own the vehicle Does not have to pay any taxes on the vehicle for the first six months
Makes monthly payments on but does not own the vehicle
A bank can help you _____ your money and keep it _____. Budget; available Deposit; budgeted Find; growing Manage; safe
Manage; safe
Credit card companies charge stores a 2-3% fee for every purchase made with credit cards. This is called a(n) . . . Merchant fee Cash advance fee Annual fee Over-the-limit fee
Merchant Fee
Contentment is hindered by ___________. The Five Foundations Money principles Delayed gratification Immediate gratification
Money principles
An easy way to avoid ending up with errors in your checking account is to simply . . . Only use cash Monitor your account at least twice a week Keep all your receipts Budget often
Monitor your account at least twice a week
How often should you create a budget? Daily Weekly Monthly Biannually
Monthly
Some of the services banks offer include . . . Mortgages, check writing, and debit cards Paying off your student loan debt and saving for your future Creating a personalized budget for you and managing your schedule Teaching you how to handle your finances and encouraging you to cut up your credit cards
Mortgages, check writing, and debit cards
Why should you never buy the extended warranty? Most retailers will replace or repair the product if it stops working within the first year. You should buy the extended warranty. It is a smart financial decision. Retail items and products rarely break or malfunction. The retailers never keep their promises.
Most retailers will replace or repair the product if it stops working within the first year.
What is the digital marketing strategy that tracks users across the web? Content marketing YouTube videos Native ads Retargeting
Native ads
How many categories should you have in your budget? 15 or more No more than 10 At least 3 No limit; use as many as you need to keep your budget accurate!
No limit; use as many as you need to keep your budget accurate!
When looking over your credit report, it's important to make sure . . . No lines of credit have been opened under your name without your knowledge Your credit score is over 700 At least five businesses have requested your credit report The information listed is over 10 years old
No lines of credit have been opened under your name without your knowledge
An example of discretionary spending is _______. Nonessential goods and services Monthly rent Transportation Utilities and food
Nonessential goods and services
Using credit has not always been a socially accepted practice, but it has become . . . Normal in American culture A practice used by the wealthy Less acceptable Necessary for life in America
Normal in American culture
Distrust, unemployment, and bank fees are a few excuses people give for . . . Not looking for work when their checking account is getting low Not making and sticking to a budget Not having a savings or checking account Not filing their taxes
Not having a savings or checking account
The best way to build wealth is to start investing early. You should start investing money . . . As soon as you have extra cash Once you have a fully funded emergency fund Once you're out of college, living debt-free, and have 3-6 months of living expenses saved When the stock market is performing really well
Once you're out of college, living debt-free, and have 3-6 months of living expenses saved
Which of the following is NOT a characteristic of an entrepreneur? Risk taker One Dimensional Courageous Visionary
One Dimensional
What is the best way to avoid falling into debt? Take out a small loan for any purchases over $1,000. Use airline miles earned through a credit card to help pay for a vacation. Only buy things that you can purchase with cash. Use credit to pay for large expenses now so that you have plenty of time to pay it off.
Only buy things that you can purchase with cash.
Part of making a plan to _____ involves searching for scholarships, saving, and talking with your family about what kind of financial help you'll get. Get good grades Take out a student loan Live in a dorm Pay cash for college
Pay cash for college
What is The Fourth Foundation? Build wealth and give. Save a $500 emergency fund. Pay cash for your car. Pay cash for college.
Pay cash for college.
What is the Third Foundation? Create a monthly budget. Save for retirement. Pay cash for college. Pay cash for your car.
Pay cash for your car.
The smartest way to buy a car is to ________________. Pay for it in cash Finance it but pay the debt as quickly as you can Take out a personal loan for it Lease it
Pay for it in cash
Scholarships are a great way to fund your education because you don't have to . . . Pay them back Be a student Apply for them Write an essay
Pay them back
The debt snowball method involves . . . Waiting until the winter months to begin paying off debt Paying off debts from largest to smallest Pooling together money from other people to pay off your debt Paying off debts from smallest to largest
Paying off debts from smallest to largest
Something that credit card commercials don't show you is . . . How great your life will be with payments People making payments for months or years on those credit card purchases How much your credit score will grow right away How happy your parents will be that they don't have to lend you cash anymore
People making payments for months or years on those credit card purchases
Research shows that nearly half of Americans (46%) feel stress and anxiety about the amount of _______ they have. Personal debt Categories in their budget Debit cards Money
Personal debt
If your assets total more than your liabilities, you will have a(n) _____ net worth. Unknown Equal Positive Negative
Positive
The _______________ is the total amount of the car loan, plus taxes and fees. Term Interest Value Principal
Principal
Reading the owner's manual, using the product as intended, and keeping the receipt are ways to . . . Avoid regretting an impulse purchase Think through a purchase Go into debt over an item Protect and maintain your purchase
Protect and maintain your purchase
The three components of compound growth are money, time and _________________. Rate of return Retirement Investments A large paycheck
Rate of return
The National Study of Millionaires revealed that millionaires are more likely to . . Have an account with at least three social media platforms Watch TV at least 10 hours each week Read one nonfiction book each month Get up by 5 a.m. each morning
Read one nonfiction book each month
FAFSA is the federal application required to . . . Receive financial aid Get a part-time job your first semester Do a work-study program Get into college
Receive financial aid
Verifying your bank's online account statements for accuracy is called ____________. Direct deposit Debit card fraud Adjusting your budget Reconciling your account
Reconciling your account
Social Security benefits are meant to ________ your income. Replace 40% of Tax 100% of Decrease Fully replace
Replace 40% of
____________ is the process of figuring out how much money you'll need in retirement and creating a plan to get there. Retirement accounting Retirement planning Outrageous generosity Investment banking
Retirement planning
Roth IRA, 401(k), 403(b), 457, and Simplified Employee Pension are all examples of ______________. Tax forms Mutual funds Retirement plans Investment bankers
Retirement plans
When is the right time to start creating and living by a budget? Right now - it's never too early! Once you have a job with an income When you decide it's time to buy a car When you start researching colleges and the costs that come along with it
Right now - it's never too early!
For entrepreneurs, taking _________ and growing a business go hand in hand. Classes Breaks Risks Applications
Risks
What is The First Foundation? Open a checking account. Save a $500 emergency fund. Build wealth and give. Pay cash for college.
Save a $500 emergency fund.
Once you have a $500 emergency fund, you should . . . Start putting it toward debt Save it until you have an emergency Invest it in the stock market to grow your money Use the money to pay for health insurance
Save it until you have an emergency
An important money principle to consider is that you should _____ and _____ your money. Spend; invest Invest; endow Invest; lay out Save; invest
Save; invest
Part of being a smart consumer is being able to . . . Set up digital wallets and mobile payment Discern when to open a retail store credit card and when not to Use a credit card for the points without going into debt Say no to an unnecessary purchase
Say no to an unnecessary purchase
_____________ require the borrower to put up collateral for the loan. Secured loans Revolving credit Interest rates Unsecured loans
Secured loans
A _____ financial goal takes up to two years to reach. Long-term Medium-term Short-term Five-level
Short-term
Never invest your money in ______ because it/they are extremely risky. CDs Mutual funds Single stocks Real estate
Single stocks
Creating a budget, having clear money goals, and slowing down to think through a purchase are all practices of a ____________. Free spirit Foolish consumer Smart consumer College student
Smart consumer
What's a better question to ask instead of, "Where do I want to go to college?" "Do I want to go to college?" "Where do I want to live?" "How do I get into college?" "What do I want to do for a career?"
"What do I want to do for a career?"
The Federal Deposit Insurance Corporation (FDIC) and National Credit Union Administration (NCUA) keep your money in the bank insured up to ______ per account. $250,000 $25,000 $2,500 $250
$250,000
The average college student in America graduates with ________ in student loan debt. $20,000 $10,000 $5,000 $35,000
$35,000
It takes the average person _________ to pay off their student loan debt. 2 years 5 years 10 years 20 years
20 years
If you're over the age of ___, you need a will. 60 18 29 14
29
Once you're out of school, have started your career, and have zero debt, your emergency fund should have _________. 3-6 months of income 3-6 months of living expenses $3,000 $5,000
3-6 months of living expenses
Although the majority of Americans think budgeting is important, about______ of Americans actually use a budget. 75% 50% 23% 35%
35%
A great way to make an impression after an interview is to send a handwritten thank-you note to your interviewer within ________ after your interview. 48 hours 30 minutes 30 days 2 weeks
48 Hours
Which is an example of an appreciating asset? A home. A new car purchased within the past 6 months. A piece of farming equipment. A computer used for business purposes.
A Home
A debit card, ATM access, payroll direct deposit, and checks are basic features of ___________. A checking account A savings account Online banking A money market account
A checking account
What are The Five Foundations? A starting point for adults regarding finances A common conclusion for debt A financial literacy technique A personal financial action plan
A personal financial action plan
The only place you should keep your emergency fund money is... An envelope in a safe place A Roth IRA A safe in your bedroom A savings account or money market account.
A savings account or money market account.
If you prefer great customer service and lower fees . . . A small, local bank is often a great option A large, national bank is for you You should use the check cashing service at a large retailer You should jump from bank to bank until you find the perfect match A
A small, local bank is often a great option
Make sure your bank has plenty of ______ and ______. Security breaches; foreign transaction fees ATM locations; a mobile banking app Insurance; monthly maintenance fees Branches; low interest rates
ATM locations; a mobile banking app
The top three careers reported among millionaires were _____________, _____________, and ___________. Accountants; engineers; teachers Celebrities; developers; writers Lawyers; surgeons; accountants Pro athletes; bankers; CEOs
Accountants; engineers; teachers
The amount of interest charged on a debt but not yet collected is called... Growth rate Same-as-cash Interest rate Accrued interest
Accrued interest
What should you do if you overspend in one category of your budget? Adjust your budget by removing money from other spending categories. Just leave it. It will probably work out fine. Ask a friend for the money you overspent. Take money from the Giving category. You're giving to yourself!
Adjust your budget by removing money from other spending categories.
What kind of money counts as income? Only the money you make at your job Money in your savings account All money that you receive, including money from your job and gifts like birthday money Only money deposited into your bank account
All money that you receive, including money from your job and gifts like birthday money
What three questions is the brain always asking? Am I safe? What are my surroundings? What are my thoughts? Am I safe? Do I belong? Does this feel good? Can I buy it? Should I buy it? Will I buy it? Am I nervous? Am I mad? Am I scared?
Am I safe? Do I belong? Does this feel good?
You'll have less freedom with your money if you . . . Invest in the stock market Are paying for things in your past Put money in a bank account Make less than $35,000
Are paying for things in your past
The Proximity Principle says: In order to do what you want to do, you need to be ________ people who are doing it and in __________ where it's happening. Nice to; areas Friendly to; proximity to Researching; areas Around; places
Around; places
To know your net worth, subtract your liabilities from your _____. Assets Previous net worth Net income Other liabilities
Assets
A two-year degree with specialized training, a flexible schedule, and lower educational costs is called a(n) ______________. Graduate degree Bachelor's degree Associate degree Community college degree
Associate degree
Your money personality can affect your _____. Ability to budget Personal values Choice of bank Attitude toward budgeting
Attitude toward budgeting
The purpose of an emergency fund is to... Teach you discipline—saving is purely a good exercise in self-control. Teach you how to invest in growth stock mutual funds. Have some extra money in a checking account in case you need to transfer some to your spending categories. Be able to cover an unexpected expense with cash and protect you from having to pile up debt when something goes wrong.
Be able to cover an unexpected expense with cash and protect you from having to pile up debt when something goes wrong.
Since marketers have sophisticated technology and plans to get your money, what can you do to make sure you don't fall into their trap? Be aware of when and where you're being marketed to. Never buy anything online. Stay off any form of digital media entirely. Make snap decisions to buy products.
Be aware of when and where you're being marketed to.
Why do some accounts, like savings accounts at your local bank, earn interest? Because you deposit money, adding to your principal each month Because the bank pays you to use your money Because of inflation Because those accounts always have great interest rates
Because the bank pays you to use your money
Personal finance is 20% head knowledge and 80%___________. Motivation Good intentions Attitude Behavior
Behavior
____________ is an example of a soft skill. Building a house Being a team player Analytics Computer programming
Being a team player
What is NOT a benefit of working while in school? Develop skills Earn a grant Gain experience Boost your GPA
Boost your GPA
You should always make sure you have a... Credit card Direct deposit Credit line Budget
Budget
What is The Fifth Foundation? Build wealth and give. Find a financial professional. Get out and stay out of debt. Pay cash for your car.
Build wealth and give.
What is The Fifth Foundation? Pay cash for college. Save for retirement. Build wealth and give. Pay cash for your home.
Build wealth and give.
Overdraft protection sounds like a good idea . . . Because it is But you have to pay back the deposited money with interest And it helps you build wealth But it will ruin your credit score
But you have to pay back the deposited money with interest
Why do stores rarely advertise the full price of big purchases like smartphones? By showing you only the monthly payment, they make the product seem affordable. Hiding the full price allows stores to change their pricing as the market fluctuates. They are trying to keep their prices competitive. They are trying to cheat you.
By showing you only the monthly payment, they make the product seem affordable.
Which of these is an example of a bold first impression when applying for a job? Having a flashy designed resume Applying a couple of weeks after the job is posted Applying several times for the same position Calling the hiring manager and introducing yourself
Calling the hiring manager and introducing yourself
Credit cards that offer flashy rewards like airline miles often . . . Charge a high annual fee Don't include protection against fraud Can't be used for personal expenses Have no interest fees
Charge a high annual fee
Predatory lenders get their negative reputation from . . . Discreetly selling personal bank information Limiting the amount of time a borrower has to use a loan Taking advantage of people during the Great Depression Charging high fees for loans and targeting desperate people
Charging high fees for loans and targeting desperate people
Credit card companies make the most profit from _______________. Incentive programs with banks Government tax breaks Partnering with companies to offer rewards to customers Charging interest to customers who only pay part of their monthly debt
Charging interest to customers who only pay part of their monthly debt
Before you insert your debit card at the gas pump, you should always. . . Ask the store clerk if there has been a thief here lately Make sure you have enough money in your account Check out the card reader to see if it looks different, loose, or worn Pay cash—never use a card at a gas pump
Check out the card reader to see if it looks different, loose, or worn
What is a good way to make sure you're creating a budget that's realistic? Make sure you have enough money in your savings account to pull from if you overspend. Check your calendar so you can plan for upcoming monthly expenses. Make sure your budget is perfect before starting. If it isn't just right, don't use it. Make sure you create a budget every single day.
Check your calendar so you can plan for upcoming monthly expenses.
Compound interest is earned at a fixed rate, while ________ is an average based on an investment's past performance. Compound growth The Fifth Foundation Interest rate The principal
Compound growth
Investing your money earns you more money because of . . . Checking accounts Mortgage payments Compound growth Short-term savings
Compound growth
_______ is a millionaire's best friend. Profit sharing High returns Compound growth Accrued interest
Compound growth
Which two habits are the most important for building wealth and becoming a millionaire? Working a high-paying job and relying on a trust fund Investing into the right stocks and using a private CPA Consistently investing money and patience to give it time to grow Always paying off your credit card on time and putting extra money into a retirement account
Consistently investing money and patience to give it time to grow
If you're a victim of card fraud... Call 911 before making any other purchases Wait for your bank to contact you Contact your bank immediately Wait until the next week to contact your bank
Contact your bank immediately
Appreciating who you are and what you have instead of wanting what your friends have is called _______________. Consumerism Gratitude Contentment Comparison
Contentment
Credit isn't a wealth-building tool, it's a business that makes money for . . . Individuals who use credit cards Local businesses and homebuilders Stock market investors, tax agencies, and financial advisors Credit card companies, banks, and lenders
Credit card companies, banks, and lenders
Which of the following is NOT a component of a budget? Giving Income Saving Credit score
Credit score
You need to track everything that involves money, including . . . Your clothing budget for the month Debit card purchases, third-party app transactions, and ATM withdrawals All of the sales that are currently happening The latest retail store credit card offers
Debit card purchases, third-party app transactions, and ATM withdrawals
You should avoid any bank service that leads to . . . Multiple checking accounts Savings Debt Gaining interest
Debt
The first step you should take when you want to make a large purchase is . . Ask your parents to loan you the money with low interest Get a new credit card Decide how much you'll need to save and the time frame you want to save it in Sell something and use the proceeds
Decide how much you'll need to save and the time frame you want to save it in
Ask yourself, "Do I need this ___ for my ___?" before you start applying to schools. Career; college Degree; career Grant; job Loan; future
Degree; career
Which of the following is NOT a way to make yourself a valuable employee in the future? Improve your communication skills Learn computer literacy skills Become a team player Determine how much income you should make
Determine how much income you should make
The first step in finding your dream job is ___________. Applying Discovering your talents, passions, and values Dreaming about it Interviewing
Discovering your talents, passions, and values
Going to the movies is an example of what types of expenses? Intermittent and fixed Discretionary and fixed Discretionary and variable Intermittent and variable
Discretionary and variable
The first thing you need to do to get intentional about your future is... Consider the cost of education Dream of the possibilities Build your resumé Determine your college ROI
Dream of the possibilities
Banks invest their customers' deposited money and then . . . Earn interest, keeping all of it as their own profit Typically lose some of it in risky investment deals Pay their customers 100% of the earned interest Earn interest, paying the customer a small amount of interest on their accounts
Earn interest, paying the customer a small amount of interest on their accounts
Making the right choices with your money—managing your money—involves knowing how . . . Consumer decisions will affect your accounts Planning, saving, spending, and investing will define your financial portfolio To make bank deposits using registers with the appropriate transactions listed Earning, budgeting, saving, spending, and giving affect your money
Earning, budgeting, saving, spending, and giving affect your money
While saving money isn't easy at first, it will make your life a lot _______ in the future if you make it a habit now. Longer Poorer Harder Easier
Easier
The main reasons for saving your hard-earned money are... Investing, indulging, and influencing Emergencies, large purchases, and wealth building Buying gifts, donating to charities, and building up a college fund for your kids Paying for your dream home, buying your dream car, and going on your dream vacation
Emergencies, large purchases, and wealth building
45% of Americans have less than $1,000 saved for a(n) _______. Emergency Car Retirement fund New smartphone
Emergency
It's your right as the consumer to . . . Keep a product even if it malfunctions or has manufacturing issues Expect a product to live up to the quality promised to you before you purchased it Buy whatever you want, as long as you don't go into debt over it Pitch a fit if you don't like the product you just purchased, and demand a refund
Expect a product to live up to the quality promised to you before you purchased it
90% of millionaires make over $100,000 a year. True False
False
Banks got into the credit business before 1920 because charging exceptionally high interest rates was legal. False True
False
Being a spender has many more positives than being a saver. False True
False
Debt is a tool to use to make you wealthy. True False
False
Dropping out of college means you don't have to pay your student loans. True False
False
If you don't know the company dress code, it's best to dress very casual for an interview. True False
False
If you get married, only one person is responsible for budgeting. True False
False
If you have an irregular income, budgeting won't work for you. True False
False
In order to outpace inflation when investing, your investments need to have a lower rate of return than the rate of inflation. True False
False
It's okay to borrow money from your retirement account, but don't borrow money to invest in it. True False
False
It's okay to make an online purchase if you're on unsecured Wi-Fi, as long as you log off as soon as you're done. True False
False
It's okay to not understand all the specifics of your financial aid before accepting the money. True False
False
Loans that directly help you advance in life, such as student loans, are acceptable debts. True False
False
Net income is the amount you get paid before taxes. True False
False
Online budgeting apps are more effective than budgeting with pen and paper. True False
False
Overdrafting your account is a sign of diligence and responsibility. True False
False
Student loans are a type of "good" debt. True False
False
Taking an entry-level position makes it difficult to advance in a career you want to explore. True False
False
There are certain things, like renting a car or booking a hotel room, that you cannot do without having a credit card. True False
False
When a homeowner takes out a home equity line of credit (HELOC), that loan can only be used for home repairs and renovations. True False
False
When you invest, your goal is to earn a negative rate of return on investment. True False
False
You are either only a natural saver or a natural spender. You cannot have a balance of both. False True
False
You should wait to be generous until you have money to give. True False
False
Your college degree will only cost you the tuition, nothing more. True False
False
Your emergency fund should go in your checking account, NOT a money market account. True False
False
Your first job will likely be your dream job. True False
False
Your monthly rent payment is an example of a variable expense. True False
False
It's your responsibility to know about all of the _______ before choosing a bank. Options for loans Branch locations Employees who work there Fees and services involved
Fees and services involved
What is a way to stay accountable to reaching your financial goals? Finding a person you trust to help keep you on track with your money goals Hiring a financial advisor to make your decisions about money for you Looking at the budget you set at the end of the month Creating specific categories in your budget
Finding a person you trust to help keep you on track with your money goals
Certificate programs, boot camps, and accelerated programs are typically more __________ than other educational programs. Expensive Time consuming Challenging Flexible
Flexible
What are the Four Walls? Utilities, college fund, restaurants, and car insurance Cell phone bill, car insurance, shelter, and money for the movies Food, utilities, transportation, and college fund Food, utilities, shelter, and transportation
Food, utilities, shelter, and transportation
Once you turn 18, you should regularly check your credit report . . . For errors or signs of identity fraud To keep an eye on your credit score To make a plan for improving your credit score Only if you have a credit card
For errors or signs of identity fraud
When someone steals and uses your debit or credit card info, that's called ______________. Authorized spending Fraud Borrowing Networking
Fraud
_______ is the cure for ________. Selfishness; thinking of others first Generosity; selfishness Love; the income gaps in our society Investing wisely; estate planning
Generosity; selfishness
Without any debt, you can be outrageously _______. Thrifty Selfish Generous Cautious
Generous
What is The Second Foundation? Build wealth and give. Pay cash for your car. Save a $500 emergency fund. Get out and stay out of debt
Get out and stay out of debt
Getting good grades and scoring well on college entrance exams give you a better chance of ____________. Graduating early Getting an interview Getting a scholarship Going to an out-of-state college
Getting a scholarship
Live like no one else now, so later you can live and ____ like no one else. Be selfish Work hard Hoard your resources Give
Give
One of the main reasons we build wealth is so that we can . . . Give to those in need Spend it all on ourselves Impress the people around us Prove that we are successful
Give to those in need
A common misconception is that budgeting will keep you from having fun, when in reality a budget... Gives you permission to spend Restricts your fun completely Adds more stress to your life Means there are no rules—you are free to use your money however you want
Gives you permission to spend
The first priority in your budget should be _____. Investing Saving Spending Giving
Giving
You can build a legacy you'll be proud of by . . . Giving your time and money to others Thinking of yourself first Sending your kids to trade schools Keeping 10-12 months of living expenses in your emergency fund
Giving your time and money to others
Car lease agreements come with a stipulation that you must pay a penalty if you___________. Don't wash the car before returning it Don't park under a garage Drive the car out of state Go over the pre-established mileage cap
Go over the pre-established mileage cap
You can fund your education by finding the right mix of ___, ___, and ___. Scholarships; trust funds; federal aid Work; loans; cash Grants; scholarships; work Cash; loans; grants
Grants; scholarships; work
_______ skills are things you learn in school or receive special training on. Hard Soft
Hard
As an effective marketing strategy, companies pay a lot to... Choose a brand similar to theirs. Get you to dislike their branding. Leave you confused with how their product works. Have their products strategically placed in stores.
Have their products strategically placed in stores.
Personal finance is 20% _______ and 80% _______. Head knowledge; behavior Behavior; head knowledge Cause; effect Reactions; behaviors
Head knowledge; Behavior
What does a budget show you? How much money you plan to come in and go out during the month How much you need to save How much money you need to earn How much money you spent last month
How much money you plan to come in and go out during the month
Your resume should NOT include ___________. Your past job experiences Professional references How much money you want to make Your education
How much money you want to make
Liquidity is . . . How quickly and easily you can access your money A great way to find a financial service that's right for you When you deposit silver or gold and they liquify it for you How money flows from bank to bank
How quickly and easily you can access your money
The interest rate on a savings account determines . . . How quickly your money will grow over time How much money you need to have to open the account How much you will pay the bank to manage the account The amount of time your money will be in the account
How quickly your money will grow over time
Many high schoolers get so caught up in the idea of the college experience that they don't think critically about . . . Their high school GPA How their college choice will affect their financial future Their dream job What requirements they need to get into college
How their college choice will affect their financial future
Your money personality impacts . . . How you handle money Your financial literacy level What you plan for as an adult Your understanding of bank transactions
How you handle money
When donating money, you should always . . . Assume the best and trust the charity will use your donation well. Identify a cause that matters to you and research the charity thoroughly. Make short-term commitments to various charities. Give to as many organizations as possible to share the love.
Identify a cause that matters to you and research the charity thoroughly.
Why is paying for something in cash a better option than a virtual payment even if it isn't as convenient? It isn't a better option. The perks of virtual payments outweigh the downsides. It's easier to part ways with cash, so you're more likely to overspend. If you make spending less convenient, you're less likely to buy things you don't need. It helps the store clerk when you use cash.
If you make spending less convenient, you're less likely to buy things you don't need.
Americans spend over $2,100 a year on ______________. Credit card fees Groceries and eating out Entertainment Impulse purchases
Impulse purchases
Personal finance is all the financial decisions a(n) _______ must make in order to earn, budget, save, spend, and give money over time. Individual or family Company or organization Individual or company Bank
Individual or family
Be aware of any ______ you might receive, but don't bank on it as a key part of your retirement plan. Additional work Bonus checks Inheritance Tax refunds
Inheritance
Most students don't consider that they'll end up paying far more than the original amount they borrowed on their student loans because of ________. Monthly payments Interest rates Higher income The debt snowball
Interest rates
Never _____ something you don't _____. Diversify; enjoy Invest in; understand Finance; think will appreciate in value Buy; invest in
Invest in; understand
When you invest in a mutual fund, you are contributing to a pool of money that will be . . . Given to hundreds of local charities in your area Invested in a mix of stocks, bonds and money market accounts Taxed based on each individual investor's annual salary Put into a separate savings account for your children to inherit someday
Invested in a mix of stocks, bonds and money market accounts
How you spend and give your money . . . Can't be changed, even if you try Is the most important thing in life Is a reflection of your personal values Doesn't matter until you're in your 40s
Is a reflection of your personal values
Why is budgeting so important? It helps you brush up on your math skills. It gives you control of your money and sets you up for financial success in the future. It helps you figure out the best way to justify purchases that maybe aren't necessary. It's a good way to make sure all your money is spent by the end of the month.
It gives you control of your money and sets you up for financial success in the future.
Why is tracking your expenses throughout the month important? It really isn't that important in the long run. It helps you pull money from your savings to spend in other categories. It gives you insight into whether you're sticking to the budget you set. It allows you to delete categories you don't like.
It gives you insight into whether you're sticking to the budget you set.
If you see "pending" on an account charge, that means. . . It is suspected of being a fraudulent charge It hasn't been fully processed yet The payment was declined You need to make a deposit before it is paid
It hasn't been fully processed yet
Why do stores like scan and go options, apps, and one-click purchases? It's easier for the retail store clerks. Digital pay is the way of the future, and retail stores like being ahead of the times. It makes paying easier and faster, so customers are more likely to overspend. It's harder for customers to pay, so they end up saving money.
It makes paying easier and faster, so customers are more likely to overspend.
Why does brand recognition help businesses? It keeps the consumer from buying more of their product or service. It helps them partner with other businesses. It helps the business recognize their own logo. It makes their name and logo easily memorable for consumers.
It makes their name and logo easily memorable for consumers.
When riding the highs and lows of the stock market, remember . . . You can't go wrong when investing money into stocks. It will level out, so stick with it! It's unpredictable and risky. You should pull your money out and steer clear. The S&P isn't a reliable source when it comes to navigating the growth and decline of stocks.
It will level out, so stick with it!
What is the envelope system? It's a method of budgeting that uses envelopes labeled with specific budget categories for your cash. It's a systematic approach to budgeting with a digital app that organizes categories based on qualitative amounts. It's a way to budget that involves putting a credit card in each envelope to use for that category. It's a system that involves writing your entire budget on an envelope.
It's a method of budgeting that uses envelopes labeled with specific budget categories for your cash.
With online banks, all of your deposits, transfers, and bill payments happen digitally, but . . . Online banks should never be trusted These banks do not offer interest on savings accounts It's often more difficult to get in touch with a real person when you need assistance They do not provide a debit card
It's often more difficult to get in touch with a real person when you need assistance
As a single adult, you should . . . Never seek financial advice from others Keep managing your money as a priority Beware of planned and budgeted buying Seek a financial counselor or advisor by age 25
Keep managing your money as a priority
What is the key to failure? Never embracing it Avoiding it Talking about it Learning from it
Learning from it
Being smart about how you spend your free time is important when building your career. Which of the following is a great way to spend your free time? Streaming videos online. Checking social media. Learning new things. Playing video games.
Learning new things.
A money principle to keep in mind is to live on _______ you make. Less than The same as More than Exactly 20% below what
Less Than
If you really want to save money, you've got to . . . Fly economy class Live on less than you make Invest in a Roth IRA Have a financial advisor
Live on less than you make
When you set financial goals, they should be . . . Specific, measurable, time-sensitive, yours, and written Only time-sensitive Timely, bank-based, specific, and yours Specific and measurable
Specific, measurable, time-sensitive, yours, and written
After World War I, the demand for products increased, and people began getting credit without loan sharks. Because of this, credit... Started to become more socially acceptable Increased so rapidly, loan sharks became obsolete Was devalued in the marketplace Was offered at even higher interest rates by loan sharks
Started to become more socially acceptable
An entrepreneur is someone who ______________. Works an entry level job at a large business Starts and runs their own business Gets hired to work for their dream company Starts and runs someone else's business
Starts and runs their own business
A security that represents part ownership of a company is called a(n) _____________. Stock Bond Certificate of Deposit Annuity
Stock
Savers have a tendency to be . . . Strict with purchases for only themselves Strict with what they spend their money on, other than groceries Strict with their purchases but spend money without a plan Strict with their money and not spend any of it
Strict with what they spend their money on, other than groceries
To stay extra focused on your debt-free degree goal, you will need to avoid . . . The FAFSA A college degree All types of financial aid Student loans
Student loans
Your __________, _________, and ___________ make you who you are. Work; family; experience Passions; purpose statement; talents Talents; passions; values Friends; education; values
Talents; passion; values
In 1972, what association made borrowing money to attend college much easier than it had been? The Student Federal Funding Association (SFFA) The Federal Student Approval Association (FSAA) The Student Loan Approval Association (SLAA) The Student Loan Marketing Association (SLMA)
The Student Loan Marketing Association (SLMA)
What does it mean to be blacklisted by a bank? You passed the financial literacy test and they offer to pay you for banking with them. They promise you a higher credit score in exchange for a 15% interest rate on your investments. The bank doesn't allow you to open an account because you handled money poorly in the past and couldn't pass their financial background check. They have decided to charge you extra fees and limited the services available to you.
The bank doesn't allow you to open an account because you handled money poorly in the past and couldn't pass their financial background check.
To think big picture, you need to understand that . . . Your goals are less important than buying the latest and greatest stuff You can buy happiness The best way to be content is to have more money The best way to have more money is to have contentment
The best way to have more money is to have contentment
What is financial literacy? The curriculum provided to college students about finances for their degrees The content provided in bank statements for consumers The knowledge and skill base necessary for people to be informed consumers and manage their finances effectively The skills to read financial documents for personal finance classes, goals, and statements
The knowledge and skill base necessary for people to be informed consumers and manage their finances effectively
Banks and lenders use credit scores to determine . . . The likelihood that someone is able to repay debt How much collateral someone has available to put up for a loan A person's financial responsibility How successful someone is
The likelihood that someone is able to repay debt
What does "bull and bear" reference? Mutual funds Your investments The real estate market The stock market
The stock market
Which principle says that a certain amount of money today is worth more than the same amount in the future? Principal interest The time value of money Rate of return Inflation
The time value of money
The best way to budget is... On paper The way that works best for you Creating a spreadsheet By using a digital app
The way that works best for you
Which of the following is part of the formula that determines a person's FICO score? The percent of income that they invest into mutual funds Their income level during a one year period The dollar amount in their savings funds Their history of payments made to lenders
Their history of payments made to lenders
Balancing your checking account is a lot like working on your budget because . . . They both get easier and build money confidence the more you do them They both involve money They're not alike at all They both lose you money in the long run
They both get easier and build money confidence the more you do them
Mutual funds are less risky and can outperform the stock market because . . . They're not diversified. They guarantee a high rate of return. They're fully liquid. They invest in several companies at once.
They invest in several companies at once.
How many months does it usually take for your budget to start working as a budget should? One Four Five Three
Three
______ is key when it comes to compound growth. Roth IRA Attitude Money Time
Time
Why might someone choose to diversify their investments? To keep them from getting bored with one form of investment. To balance high-risk investments with more steady and predictable ones. There isn't a good enough reason to diversify your investments. To keep the risk as high as possible so the reward is equally high.
To balance high-risk investments with more steady and predictable ones.
What is the goal of an emergency fund? To pay for large purchases To save for your children's college expenses To have cash on hand for unexpected events To pay for health insurance
To have cash on hand for unexpected events
Franklin D. Roosevelt passed the New Deal because of the Great Depression in the 1930s. What was the purpose of this program? To divide the national budget in half and distribute it To alleviate financial concerns with the United Nations To create a borrowing system within the country To promote economic recovery and social reform In 1972, what association made borrowing money to attend college
To promote economic recovery and social reform
Commission is when you make money based on the percentage of _____. Items sold Budgets Investments Total sales
Total sales
________ typically take(s) less than two years to complete, teach(es) you the skills you need for that career, and is/are often tied to that region's employment needs. On-the-job training Online courses Military training Trade and vocational schools
Trade and vocational schools
A budget says what will happen with your money, while a cash-flow statement shows what already happened. True False
True
A car is a depreciating asset. True False
True
A credit score is an indicator of how well someone pays off their debt, not how well they handle money. True False
True
A debit card linked with your checking account is a good option for regular spending. True False
True
Avoiding debt can lead to financial freedom and hope. False True
True
Before you invest, you should make sure a mutual fund has done well for 5-10 years. True False
True
Companies use marketing to get your prefrontal cortex offline so you'll be vulnerable to impulse purchases. True False
True
Credit Unions differ from retail banks in that they typically require membership based on specific criteria. True False
True
Detailed categories on your budget will help you make better spending decisions. True False
True
Employers consider soft skills as important as hard skills. True False
True
If people saved the equivalent of a car payment each month for a year or two (instead of spending it on payments and interest), they could have enough money to buy a car with cash for much cheaper! True False
True
If you see a charge you don't recognize, you should report it to your bank immediately. True False
True
In-state college tuition is almost always a cheaper option than out-of-state colleges. True False
True
It is possible to pay for college with cash. False True
True
Job shadowing is a great way to gain experience in a career field. True False
True
Many employers will research job candidates' social media posts. True False
True
Many service industries, including massage therapy, financial services, auto repair, electrical work, and plumbing , don't require four-year degrees. True False
True
Mentors are people who can guide, encourage, and hold you accountable as you make the climb to your dream job. True False
True
People who are struggling with money often turn to alternative financial services like payday loans, but these services actually end up causing them to lose money. True False
True
Private student loans typically have a higher interest rate than federal student loans. True False
True
Shoe companies can use influencer marketing to build brand recognition to gain credibility and familiarity. True False
True
Since federal funding is often awarded on a first-come, first-served basis, you'll be more likely to get financial help by filling out your FAFSA as soon as possible. True False
True
The key to contentment is gratitude. True False
True
The primary reason people don't budget is because they lack the behavior to stick to a budget. True False
True
Usually, the more liquid an asset is (like cash in the bank), the less return you can expect. True False
True
When using a Roth plan, you invest your money after paying taxes, and the investment grows tax-free. True False
True
When you buy with credit, you typically spend more than you would with cash or a debit card. True False
True
When you finance a new car, you will end up paying more than the sticker price. True False
True
When you're retired, you'll still have to pay taxes. True False
True
While it may not always appear so, the majority of Americans live paycheck to paycheck. True False
True
You should always do research about the company you're applying for a job at or interviewing with. True False
True
You should budget in this order: giving, savings, spending. True True False
True
You should figure out what you're passionate about before going to school for a specific field of work. True False
True
You won't find contentment by just continually buying stuff. True False
True
When applying for scholarships, you should consider both ____________ and ____________. Friends; teachers Tuition; school Range; Intensity Speed; accuracy
Tuition; school
You can save thousands of dollars by spending the first ____ at a(n) _____. Two years; name-brand school Two years; local community college Year; out-of-state school Part of your tuition; traditional four-year school
Two years; local community college
Which of the following has the lowest risk for getting your card information stolen? Using your debit card and PIN at a reputable store Making an online purchase on an unsecured site Handing your card over to a server at a restaurant. Storing your card information online
Using your debit card and PIN at a reputable store
What is an example of putting the Proximity Principle into practice? Listening to a podcast Researching Volunteering Reading
Volunteering
To decide if you're passionate about something, consider . . . Going to school for it Enlisting in the military Volunteering in that field first Getting certified in it
Volunteering in that field first
Stuff doesn't equal ____. Debt makes people look better off than they ______. Income; want to be Happiness; deserve Investments; should be Wealth; actually are
Wealth; actually are
Which of the following is NOT a key quality of a good mentor? Caring Wealthy Understanding Accomplished
Wealthy
It's okay to not understand all the specifics of your financial aid before accepting the money. If you're good at your job Your work ethic Your future career plans What college you went to
What college you went to
It's always important to prepare intentionally for an interview. Which of the following is NOT something you will find out from the company's website? The company's products and services The company's history What competitors are doing in the marketplace The company's values and mission statement
What competitors are doing in the marketplace
When deciding on the right bank for you, you should first identify what type of bank you want, the features that matter most to you, and ____________. If you want to go to an Ivy League or community college What type of home you want to own someday How large your savings account is What kind of accounts you want
What kind of accounts you want
It's not IF an emergency will happen, but _______. When Why Where How
When
To gain an understanding of your personal finances, you should know . . . Where you stand financially, how much income you have, what goals you want to set, and how you'll reach those goals Your investment portfolio and your financial advisor's contact information Your financial goals How much income you have
Where you stand financially, how much income you have, what goals you want to set, and how you'll reach those goals
When writing your purpose statement, what should you think about? Who you want to learn from and how to solve their problems. Who you most want to help and the problem you want to solve. Where you want to be in 30 years and how much money you want to make. Who you want to work for and how you can add value.
Who you want to work for and how you can add value.
With certificates of deposit (CDs), you have to pay a penalty for ____________. Withdrawing your money early Depositing money into the account Creating a savings account Using an ATM
Withdrawing your money early
What does it mean to develop power over purchase? You have power to purchase whatever you want, and you do so. You are able to slow down and think through your motives before buying something. You can make decisions very quickly when it comes to purchasing items. You are powerless in the face of an impulse purchase.
You are able to slow down and think through your motives before buying something.
What is the best way to avoid running out of money too quickly? You can invest in college. You can put your money in a safe place, like a bank, and not spend it. You can avoid making any purchases for the next 30 days. You can make it a habit to plan and set goals for your money.
You can make it a habit to plan and set goals for your money.
Something that all of the predatory financial services have in common is . . . They all require you to take out a loan They all require you to be a college graduate You end up losing money with all of them People can earn money with all of them
You end up losing money with all of them
The best way to make the contribution you were born to make is by doing work __________. That pays you a lot of money You're passionate about With nonprofits That's easy
You're passionate about
Making purchases with a credit card means that you're borrowing money with interest, and ______ pay much higher interest rates. College graduates Old people Rich people Young people
Young People
As the owner of your account, managing your money is ______ responsibility. Not your Your Your parent's The banks
Your
Which of these would count as a legitimate reason to use your emergency fund? You have a fancy event coming up but you already spent all of your Clothing budget category You forgot to budget for your mom's birthday gift The smartphone you've wanted just went on sale Your car battery died
Your car battery died
Your greatest tool to building wealth is _____________. Your credit score Your income Single stocks Tax cuts
Your income
What is the point where your greatest talents, passions, and values intersect? Your first job Your dream job Your sweet spot Your perfect place
Your sweet spot
The very best investment you can make is in ___________. A new car Real estate The stock market Yourself
Yourself
Diversification reduces your __________ by using a mix of investment types in your portfolio. Mutual funds Risk Retirement funds Income
risk
