Personal Financial Literacy

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Which of the following is an effective strategy for personal saving?
- Wait until the end of the month and save whatever is left in your checking account
- Save a certain percentage of each paycheck and deposit it directly into a savings account
- Cover all of your wants and needs and save whatever is left over
- Take out a payday loan so you can save before you receive your paycheck

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Save a certain percentage of each paycheck and deposit it directly into a savings account

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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...

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A new cell phone, college tuition, a house down payment

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Which statement best describes a savings account? This account offers a convenient way to pay bills and access cash from an ATM, This account pays you interest on money you have put away for later to help your money grow, This account is automatically debited when you use a debit card, This account typically allows an unlimited number of transactions per month

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This account pays you interest on money you have put away for later to help your money grow

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Which of the following statements about credit scores does this bar graph support? Average Score by Age Source: Credit Karma 710 690 670 650 630 18-24 25-34 35-44 45-54 55+ Options: Credit scores tend to drop as you grow older because you are more likely to miss a payment at some point, It is more difficult for young people to borrow because they have less payment history for a lender to rely upon, When young people borrow, they are likely to have lower interest rates because their credit scores are lower, It is easier for young people to get loans at lower interest rates because they are likely to have never been late with a payment

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It is more difficult for young people to borrow because they have less payment history for a lender to rely upon

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All of the following would show up on a credit report EXCEPT...
Salary of your current job, Payment history of your car loan, Credit card payment history, Student loan activity

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Salary of your current job

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Which response best completes the sentence 'It's best to begin establishing credit when you're young because'? Options: Accessing credit only becomes more expensive as you get older, Negative marks on your credit report go away faster for younger borrowers, Credit scores are free for anyone under the age of 25, You will likely need a credit history to rent your first apartment, finance your first car, or open an unsecured credit card

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You will likely need a credit history to rent your first apartment, finance your first car, or open an unsecured credit card

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Which of the following is most likely to represent a fixed rate, secured debt? A student loan, A credit card, A prepaid debit card, An auto loan

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An auto loan

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If you are having trouble making auto loan payments and are really following a tight budget, which recommendation below represents the WORST advice? Options: Find an extra source of income by taking a second job, working longer hours, or borrowing from family if they can afford to help, Continue making all payments and call your lenders and see if you can negotiate lower monthly payments, lower interest rates, or longer terms, Explore whether a free or non-profit credit counseling service could help.

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Stop making payments on some of your debts so you can focus on getting the most expensive or largest debts under control

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Denise took out a payday loan for $300 in August. By February of the next year, she was able to pay back the loan, but she had spent a total of $750 doing so. What's the most likely story of how this happened?

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Payday loans must be paid in full within two weeks, and if not, the only option is to renew the loan for a high penalty fee, which she did approximately 12 times.

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Which of the following statements is CORRECT about secured loans? They are a good choice to use for student loans, If the borrower does not make payments, the lender can repossess the item, In the event of default, the borrower loses nothing except for the down payment, They usually have higher interest rates as compared with unsecured loans

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If the borrower does not make payments, the lender can repossess the item