Financial Literacy Assessment Review

The total of monthly income remaining after all deductions have been taken out is known as

• net monthly income

• net annual income

• gross monthly income

• gross annual income

Which of the following should you remember when developing a savings plan?

• Have only high risk investments

• Pay off your low interest debt first

• Pay yourself first

• Wait until you are 40 years old

Of the following steps, which would be the FIRST step in financial planning?

• Save money for the future

• Start looking for a home to buy

• Determine your needs and goals for the future

• Get a job so you can start earning money

Alan has created a new budget. Which of the following should he NOT do?

• Stick to his budget

• Use credit for all items not in his budget

• Spend less than he earns

• Have a spending plan

Which of the following statements about credit is FALSE?

• Most people will need credit at some point in their lives

• Credit is something that is bad and should always be avoided

• Always read the fine print in a contract when you buy something on credit

• A credit score is something that can be used to determine if you get a loan

Money spent to buy or do something

• Income

• Fixed expense

• Variable expense

• Opportunity cost

• Expenses

Expenses that vary from month to month

• Income

• Expenses

• Fixed expenses

• Variable expense

• Opportunity cost

The next best alternative given up when a choice is made

• Income

• Expenses

• Fixed Expenses

• Variable expense

• Opportunity cost

Expenses that do not change from month to month

• Income

• Expenses

• Fixed Expenses

• Variable expense

• Opportunity cost

Any money earned or received

• Income

• Expenses

• Fixed expense

• Variable expense

• Opportunity cost