CA #3 Review

How does an individual's credit history affect the ability to purchase a home?

A higher credit score makes it easier to obtain a mortgage and results in lower interest rates.

For which of these purchases would a loan NOT be a sensible option?

Airline tickets to your dream vacation

Insurance that covers damage to your car from an accident is called

Collision insurance

Which payment option takes money out of your bank account immediately?

Debit Card

Based on the text, how does personal budget planning affect a person's ability to enjoy retirement with a comfortable income?

Devising a budget plan that is inclusive of long-term goals helps a person save enough money for retirement

Form 1040 and Form 1040EZ are:

Forms for filing income tax returns

What is the difference between gross and net pay?

Gross pay is before taxes are subtracted but net pay is after taxes are taken out

When preparing your taxes, what can possibly help reduce the amount of taxes that you owe?

Having credits and deductions

Based on the text above, how does a fiscally responsible individual use a savings account to protect his or her financial security?

He or she uses it to store and monitor his or her money

Which is an advantage of buying a home versus renting an apartment

Home ownership has long-term benefits including owning an asset.

The W-4 tax form is used to

Indicate how much federal income tax to withhold

Based on the text, how does credit card interest affect one's financial goals?

It drains funds that could be invested

Based on the text, which is a main advantage of debt?

It enables an individual to establish a credit history

Based on the text above, what is an advantage of putting money from a paycheck directly into a savings?

It establishes a habit of setting money aside before being tempted to spend it frivolously.

What is true of the form shown above?

It is completed by your employer and sent to you

What role does insurance play in financial planning?

It provides protection of income assets

How will paying less than the minimum payment on a credit card each month affect one's creditworthiness?

It will make it harder to obtain credit with low interest rates

Which of these is most beneficial for maintaining a good credit score?

Manage your debt wisely.

When paying bills and organizing a budget, which item and category should be considered first?

Mortgage or rent, fixed

The amount of money you're paid, after all taxes and deductions are taken out of your paycheck is called

Net income

The rate of ______ is determined by assessing the value of land and buildings.

Property tax

These taxes come out of a person's paycheck and are meant to help support people once they retire

Social Security Tax

an insurance premium is paid by

The policy holder

How does the government pay for roads, schools, and emergency services?

They are funded through taxes

What is the best reason for why someone would want to lease a house instead of buying one?

They are planning on living there for a short period of time.

Why is it necessary to have a W-2 or 1099 form when preparing your tax return?

They report income which needs to be used to file taxes

Which of the following is TRUE regarding unexpected expenses?

They shouldn't be planned for

How does a fiscally responsible individual use an emergency savings fund to improve his or her financial well-being?

To provide for unforeseen expenses

Which is TRUE when you make only the minimum payment each month?

You are charged interest on the remaining balance

Leasing a car may be a better option than buying a car if

You don't plan on having it for long and don't want to worry about regular maintenance.