Personal Finance Review

You overhear your Aunt Tina tell your mom that she, her husband, and their kids are "living paycheck to paycheck." What does Aunt Tina mean by that?

• Aunt Tina gets a paycheck one month, and her husband gets a paycheck the next month; they alternate pay periods

• Aunt Tina and her family don't have any money saved, and their paychecks are just barely covering monthly expenses

• Aunt Tina and her family have high paying jobs and don’t worry much about money

• Aunt Tina only receives paper paychecks instead of direct deposit

Which of the following is an effective strategy for personal saving?

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

• Wait until the end of the month and save whatever is left in your checking 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

Why is it so important to have a checking account?

• Opening a checking account is the first step in building your credit history, which you will need in order to receive loans, scholarships, and grants for college

• Opening a checking account is the only way to gain access to a savings account, which is essential if you want to make money by investing

• A checking account facilitates the rest of financial life by making your money available when and where you need it while also keeping it safe

• Without a checking account, you are unable to cash your paycheck or pay your taxes

You are putting together your first post-graduation budget.  Your net pay is $2,500 per month and you estimate that your monthly expenses will be $2,625.  How would you describe your budget?

• You have a surplus of $125

• You have a deficit of $2,625

• You have a surplus of $2,500

• You have a deficit of $125

Which of the following statements is an advantage of online banking?

• Using online banking, you can request transfers, pay bills and automate your savings without visiting the bank branch

• Using online banking allows you to earn a higher interest rate

• Once you set up online banking, your bank will waive overdraft, ATM, and monthly fees

• You can only shop online if your bank account has online banking features

All of the following statements about bank accounts are true EXCEPT…

• Historically, savings accounts earn higher returns than investments in the stock market

• If the bank account is FDIC-insured, your money is safe even if the bank fails

• Many banks pay interest on the money you deposit into your savings account

• Money in a checking account is usually easy to access via ATM, debit card or check

Which of the following is a good reason to start saving for retirement in your early 20s?

• You might have student loan debt to pay off as well

• You'll benefit substantially from compounding interest over all those years 

• Banks typically offer young people higher interest rates, so you'll earn more interest

• Banks typically offer young people lower interest rates, so you'll pay less in interest

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…

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

• Retirement, a house down payment, college tuition

• A new cell phone, dinner with friends this weekend, a new bike

• Retirement, college tuition, a vacation

The defining characteristic of a job in the gig economy is...

• Workers complete short-term work for many different clients

• Workers receive free phones and wifi connections

• Workers decide how much they want to pay in taxes

• Workers are paid by the federal government

Which represents the BEST time to start saving for your retirement?

• As soon as you have your first full-time job

• Once you are debt-free, including paying off all credit cards, auto loans, and your mortgage

• Right after you pay off your student loans

• At age 45, so you have exactly 20 years until retirement