Transition Unit 3

What is a disadvantage of saving for your retirement in a traditional savings account?

• 1. Savings accounts are not very safe, and you could lose all your money

• 1. Savings accounts earn very little interest, and your growth may not keep pace with inflation

• 1. Savings accounts are very costly to maintain, and the fees will reduce your savings in the long-term

• 1. Savings accounts are traditionally used for bill pay, and you will likely change accounts before your retirement bills are due

1. What does it mean if a person lives paycheck-to-paycheck?

• 1. They use their entire paycheck to cover monthly expenses and have very little money saved

• 1. Their income varies month-to-month and they save a large portion of their biggest paychecks

• 1. They use direct deposit, so their paycheck is automatically split between their checking and savings accounts

• 1. They have high-paying jobs, so don’t have to worry about how much is in each paycheck

1. Using the 50/30/20 budgeting plan can help you save money because…

• 1. It limits your spending to $50 per month

• 1. It recommends that 20% of your budget goes to debt repayment or savings

• 1. It recommends that 50% of your budget goes to debt repayment or savings

• 1. For every $50 you save, a bank will give you $30 or a credit union will give you $20

7. Tre just got a part-time job, and his sister recommends he “pay himself first.” What is she talking about?

• 1. Tre should deposit his check as quickly as possible before taxes can be taken out

• 1. Tre should set aside part of every paycheck for savings before he does any spending

• 1. Tre should spend the money he needs before he lends any to friends or gives to charity

• 1. Tre should start his own business rather than being someone else’s employee

8. Misty is going to use the 50/30/20 rule in order to save $3000 for her family’s next big vacation. Her monthly income is $2500. How many months will it take her to reach her savings goal?

• 1. 2.4 months

• 1. 4 months

• 1. 5 months

• 1. 6 months

11. Which statement is MOST accurate regarding 529 plans and health savings accounts (HSAs)?

1. 
   

• 1. 529 plans and HSAs are both used to provide income during retirement

• 1. 529 plans allow you to invest for retirement while HSAs allow you to invest for future health expenses

• 1. 529 plans can be used for education expenses while HSAs can be used for health expenses

• 1. 529 plans have tax advantages while HSAs do not

14. Which pair of savings strategies will likely work best if your goal is saving $5000 before heading off to college?

• 1. Get a couple of part time jobs to increase income and then also increase your spending

• 1. Control impulse spending and break your goal into smaller time frames

• 1. Pay all of your bills in cash and then save all your pocket change

• 1. Keep your money in a checking account and only spend using your debit card

15. A Roth IRA is best described as…

1. 
   

• 1. A retirement investment account with specific tax advantages

  
  

• 1. A specialized savings account that allows you to save for college

  
  

• 1. A checking account from which you pay your healthcare bills

  
  

• 1. A savings account at an online-only bank
     

  
  

17. Lucas’s saving balance is represented by the line y = 40x + 20 graphed below. Marcos’s savings balance is represented by the line y = 30x + 90 graphed below. What does the intersection of the two lines represent?

• 5. Marcos is saving $7 more than Lucas per week

  
  

• 5. Marcos has saved $300 more than Lucas after 7 weeks

  
  

• 5. They both saved $300 per week in the 7th week

  
  

• 5. They both have saved $300 total after 7 weeks
     

  
  

18. You are solving this system of equations by eliminating y first. Which of the following options below shows the correctly multiplied pair of equations?                 

12x + 6y = 10
2x + 3y = 8

• 9. 12x + 6y = 10
     -12x + (-36y) = -48

• 9. 12x + 6y = 10
     -12x + (-18y) = -48

• 9. 12x + 6y = 10
     -24x + (-6y) = -16

• 9. 12x + 6y = 10
     -4x + (-6y) = -16