Financial Literacy Quiz Part 1

What is a budget in financial terms?

• A type of bank account

• The amount of money you plan to spend in certain areas

• A payment type that is linked directly to your checking account

• The money you're spending on various things

Which of the following best defines 'income'?

• The tradeoff or benefit that you give-up when making a purchase

• The amount of money you plan to spend

• Money you earn, like from a job or birthday allowance

• A type of bank account where your money grows over time

What is the difference between a 'need' and a 'want'?

• A need is something you like to have, a want is an absolute necessity

• A need is an expense that you can't live without, a want is not an absolute necessity

• A need is a type of expense, a want is a type of income

• A need is a type of bank account, a want is a payment type

What is 'opportunity cost'?

• The amount of interest applied to your savings account balance

• The amount of money you plan to spend on expenses

• The tradeoff or benefit that you give-up when you make a choice or purchase

• The total amount of charges you receive at the end of each purchase period on a credit card

What is a 'Checking Account'?

• A payment type that does not automatically draw money from your checking account

• A type of bank account where a small amount of interest is applied to your balance

• A type of bank account in which interest is not usually applied to the balance

• A type of expense related to budgeting

How does a 'Debit Card' work?

• It allows you to spend money that you have not yet earned

• It automatically draws money from your savings account

• It is linked directly to your checking account and withdraws money you spend

• It accumulates interest on the money you spend

What is a 'Credit Card'?

• A type of bank account with high-interest rates

• A payment type that automatically draws money from your checking account

• A payment type that does not automatically draw money from your checking account

• A type of expense that is considered a need

What is a 'Savings Account'?

• A type of bank account where money is stored and cannot be withdrawn

• A type of bank account in which a small amount of interest is applied to your balance

• A payment type that is linked directly to your checking account

• A type of expense that you plan for in your budget

What is an expense?

• The money you spend.

• The money you put into savings.

• The opportunity you miss when you buy something.

• The taxes you pay on a purchase.

What is the purpose of budgeting?

• Only buying 'needs' and never 'wants'.

• To save all extra income.

• To build a plan for spending and saving responsibly.

• To spend as much of your money as possible.