Personal Finance Final Review

You earn a salary of $40,000 per year and decide to save 20% of your gross pay. You set a goal of creating a $16,000 emergency fund. How long will it take for you to achieve your goal?

• 6 months
• 1 year
• 2 years
• 3 years

You are interested in renting an apartment after graduating college. You meet with the landlord and complete the application. All of the following may need to be provided when you sign your lease EXCEPT

• Proof of employment
• A bank account
• First and last month's rent
• A security deposit

You're considering moving into a 3 bedroom apartment with 2 roommates, rather than living on your own post-college. Which of your expenses would likely NOT decrease by having roommates?

• Groceries and eating out
• Rent
• Cell phone bill
• Furniture

You overhear your cousin talking about the importance of creating and sticking to a budget. All of the following are good reasons to create and stick to a budget EXCEPT:

• A budget can help you identify any bad spending habits
• Using a budget can allow you to work towards your financial goals
• Having a budget can help you create an emergency fund
• Having a budget is a requirement for obtaining a mortgage

Which one of these expenses most likely represents a VARIABLE cost in someone's budget?

• Electricity bill
• Rent
• Car insurance premium
• Student loan payment

Which statement accurately describes how the 50/20/30 Rule would break down your take-home pay?

• 50% on wants, 20% on saving, and 30% on needs
• 50% on saving, 20% on needs, and 30% on wants
• 50% needs, 20% on saving, and 30% on wants
• 50% on saving, 20% on wants, and 30% on needs

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

Jocelyn gets a text alert from the bank that her account balance has dropped below $100 after a series of $20 ATM withdrawals. She has not used her ATM in over a week and wonders what she should do. What would you recommend?

• Wait until her monthly statement arrives so she can check to see if those withdrawals are still there
• Wait a week as it is fairly common for the bank to catch mistakes like this
• Check her wallet to be sure her debit card has not been stolen. If she still has it, then she should not worry.
• Contact her bank immediately as it appears that her account may have been hacked

FDIC Insurance is...

• Optional coverage consumers can purchase so that their bank deposits remain safe
• Insurance bank branches can buy to protect their business against fraud and scams
• Required if you want to do online or mobile banking
• Protection for bank customers’ deposits up to $250,000, guaranteeing their money is still available if the bank goes out of business

How often do customers typically receive a bank statement for their checking account?

• Daily
• Weekly
• Monthly
• Annually