Test: Money Management (correct answers)

Fixed Expense

A cost that stays the same from month to month.

Money Order

A form of payment that resembles a check.

Scam

A fraudulent scheme, especially for making a quick profit.

Account Verification

A process where banks check your history to make sure you will be responsible.

Stop Payment

A request by an account holder to not pay a specific payment.

Claim

A request for payment from an insurance company.

Luis received his account statement. He needs to make sure the balance in his checkbook register is correct. To reconcile his checkbook, the first thing he should do is

Add all of the transactions together

An insurance policy is

An agreement to reimburse an individual for a loss that occurs

Explain in two to three sentences, what should you do before you open a bank account?

Before opening a bank account, you should find out where their locations are. Knowing what ATMs you can use without getting fees, what your minimum balance must be in an account and when opening, and how much interest do you earn in savings accounts. Some other things to look for are any fees you need to pay and what the services they offer are.

Tammy wants to track her spending in categories. What tool should she use?

Budget software

To manage your money, you should...

Create a budget Spend wisely Create a financial plan Learn about services offered at your bank Manage your risks Organize your financial documents

There are only four types of insurance; health, life, homeowner's, and automobile insurance.

False.

When you want to open a new bank account, speak to a loan officer.

False.

A net worth statement, insurance plan, and a budget are all part of a _________ ____.

Financial plan

The first step in creating a budget is

List and total your income

Allen needed to buy new soccer shoes. He stopped by the closest store and bought a pair for $98. Later, he saw an advertisement selling the same shoes for $82. What tip could have helped Allen?

Look for bargains

Tips for spending wisely include...

Looking for bargains Tracking your spending Avoiding impulse purchases Using credit cards infrequently

Select all of the tools you could use to track your expenses.

Mvelopes Budget software Spreadsheet Mint

Mike accidentally wrote a check for more than the balance in his checking account. The bank transferred money from his savings account to his checking account to cover the check. This banking service is _________ _________.

Overdraft protection

To avoid financial risks, you should...

Protect your personal information Obtain health insurance Have an emergency fund Purchase warranties Know your consumer rights Keep your money in a safe place Become educated and informed

Sara notices that she double paid her gas bill. What online service should she use?

Request a stop payment

Regal Financial Institution specializes in home loans. What type of financial institution is it?

Savings and loan

A spreadsheet is

Software that allows you to make calculations, organize data, and make comparisons.

To balance your checkbook, you should

Subtract the withdrawals and add the deposits

A premium is

The amount an individual pays for an insurance policy

Craig graduated from college and got his first job. He rented an apartment and purchased new furniture, appliances, and a television. What risk does he face?

Theft

What are the numbers at the bottom of the check used for?

These are identification numbers used to identify the bank (routing number), your account number, and the check number.

The Kelly family of three has a car and rents an apartment with nice furniture and appliances. What types of insurance should they have?

They should have life insurance, renters insurance, disability insurance, auto insurance, and health insurance.

One reason to create a budget is to know what you can and can't afford.

True.

Jason's balance in his checkbook register is $20.60. He receives his bank statement and sees that the balance is $50.60. He notices that a check in the amount of $30 does not appear on the statement. Is the balance in his checkbook register correct?

Yes