Personal Finance Key Concept Overview

True or False? Most millionaires in the United States are doctors and CEOs, attended elite private universities, and were born into wealthy families.

• True

• False

Which of these is a true S.M.A.R.T. financial goal?

• I will save $20 each money for 3 months to buy a new game.

• I will try to learn more about how to play the piano.

• Learn how to do taxes

• I will invest for retirement every year.

Which factor would NOT affect your income level?

• career choice

• level of education

• where you live

• credit score

Expenses that are necessary and the same amount every month, such as rent, are called ___.

• fixed, discretionary expenses

• variable, discretionary expenses

• fixed, non-discretionary expenses

• variable, non-discretionary expenses

Sarah wants to create a zero-based budget. The total amount of income she plans to receive this month is $4,000. How much should she budget for saving and expenses?

• $1,000

• $2,500

• $4,000

• $8,000

How much should you save in an emergency fund?

• 1 month of expenses

• $20,000

• 3-6 months of expenses

• 1 year of your total salary

Which type of bank account is used for everyday expenses and is typically connected to a debit card and checkbook?

• savings account

• checking account

• money market account

• certificate of deposit

Which type of bank account typically offers the highest interest rates, but the money you deposit cannot be withdrawn for a set term?

• savings account

• checking account

• money market account

• certificate of deposit

True or False? Investors should diversify their investments, as it is unwise to invest all your money in the same thing.

• True

• False

Which one allows you to pool your money with other investors and invest in many types of investments?

• stocks

• bonds

• mutual funds

• commodities