Savings Practice Test

One reason people should save money is to create an "emergecy fund." Which of these is an example of an unexpected expense you might use an emergency fund to pay for?

• 6 months of cable tv

• A new cell phone if yours is stolen on the bus

• Valentine's Day gifts for friends and family

• Your back-to-school clothes and supplies

What does it mean to "pay yourself first"?

• On payday, take some money out to reward yourself with some fun spending

• Save money when you are young so you can spend more money when you are older

• Any time you get paid, set aside some portion to save before you do any spending

• Spend money on yourself first, then your immediate family, then friends or other relatives

TJ is in 7th grade right now and cuts grass for neighbors to earn money. He wants to set on short-term savings goal and one long-term savings goal. Which answer best matches those goals?

• Short term= pack of gum// long term= 3 packs of gum

• Short term= a car// long term= a nicer car

• Short term=expensive new sneakers// long term= a car

• Short term= birthday present for his mom // long term= a trip to the moview

TJ typically cuts 5 lawns per month and earns $20 per lawn. He spends money throughout the month on things like snacks, tickets to hs football and bball games, and new video games. Somehow, he ends every month with only a few dollars left. Which behavior change is MOST likely to help TJ save more money?

• Spend less time cutting grass and more time saving money

• Ask his parents for an allowance and try to save that money instead

• Before he spends, set aside $5 to save out of every $20 payment

• Spend money on a better lawn mower so he can cut more grass

Monroe's school offers an overnight trip to Washington DC for all 9th grade US history students. Even though the trip is 20 months in the future, she knows she wants to attend and that she should start saving now. If the trip costs $500 total, how much does she need to save per month to have enough?

• $20 per month

• $25 per month

• $480 per month

• $10,000 per month

Amy makes $200 per month by babysitting her neighbor's son after school. She wants to buy her dad something really special for Father's Day next year, and the holiday is 10 months away. Which strategy will work best to make sure she has enough saved by then?

• Figure out how much she'd like to spend, and then divide the cost by 10 so she knows how much to save each month.

• Save all $200 every month until Father's Day without spending anything on herself

• Don't worry about saving until closer to Father's Day- she'll figure something out

• Spend her money freely, but any time she has spare cash at the end of the month, put it in savings

Which statement best describes what it means if your bank is "FDIC insured"?

• Bank customers can buy car or health insurance at their bank

• If you lose your wallet and the cash inside is missing, your bank will pay to replace it up to a certain amount

• If you have money in your checking or savings account and the bank goes out of business, you are guaranteed to get your money back up to a certain limit

• If a bank customer gets hurt while inside the bank, the customer can sue the bank and their FDIC insurance will cover the costs

What is one BENEFIT of using a savings account instead of a checking account?

• Your savings account will charge lower ATM fees than your checking account

• Your savings account will earn interest, so the money in your account will grow without you doing anything

• Your savings account lets you write checks or pay bills easily, while it's more difficult to use your checking account

• Your savings account allows you to use online banking while checking accounts require you to visit the bank branch.

What is one DOWNSIDE of using a savings account instead of a checking account?

• Your savings account has high fees attached to it, while your checking account does not

• Your savings account has a limit of 6 withdrawals per month, while your checking account does not

• Your parents need to help you open a savings account, buy you can open a checking account without them

• Far fewer banks offer savings accounts, while far more banks offer checking accounts

As a teenager opening a savings account, which two features are MOST important for you to have in your account?

• No interest rate and no monthly fees

• No interest rate and no minimum balance requirement

• No monthly fees and no minimum balance requirement

• No monthly fee and no FDIC insurance