Banking Review

Which of the following is the best option for personal saving?

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

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

Jolene wants to have an emergency fund to cover 6 months of her expenses. Her monthly gross pay is $4,000 and her monthly expenses are $2,000. If she plans to save 10% of her gross pay each month, how long will it take her to build her emergency fund?

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What is the 50-30-20 rule of budgeting?

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When is the BEST time to start saving for your retirement?

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

• Right after you pay off your student loans

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

Experts recommend that you accumulate enough to cover 3 to 6 __________________ of expenses in your emergency fund.

• Days

• Weeks

• Months

• Years

Three of these statements best describe a checking account. Which statement best describes a savings account?

• This account offers a convenient way to pay bills and access cash from an ATM

• This account pays you interest on money you have put away for later to help your money grow

• This account is automatically debited when you use a debit card

• This account typically allows an unlimited number of transactions per month

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

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

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

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

• Aunt Annie only receives paper paychecks instead of direct deposit

Joie 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

Which of the following transactions will REDUCE your checking account balance immediately?

• Using your debit card to pay for groceries at the supermarket

• Using your credit card to pay for your school books

• Depositing a check at a local bank branch

List an advantage of online banking.

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Answer explanation

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