Personal Finance 1A Pre-Assessment

Juan saved $1,000 from his summer job cleaning pools. Which of these account types would work best for him if he doesn't need access to the money for a number of years AND wants to earn the highest interest rate?

• Regular savings account

• Money Market account

• Checking account

• Certificate of Deposit

You are developing a savings plan and using short-, medium-, and long-term goals to motivate you. Which represents possible goals from short-term to long-term? Save for…

• Retirement, a house down payment, college tuition

• A new cell phone, college tuition, a house down payment

• A new cell phone, dinner with friends this weekend, a new bike

• Retirement, college tuition, a vacation

7. Fill in the blanks with the correct responses.  If you follow the 50-30-20 rule of budgeting, you'll be putting 50% of your monthly income toward _______________, 30% of your monthly income toward _____________, and 20% of your monthly income toward ______________.

• Needs, wants, savings

• Savings, needs, wants

• Needs, savings, wants

• Wants, needs, savings

Which represents 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

• At age 45, so you have exactly 20 years until retirement

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

• Days

• Weeks

• Months

• Years

Which of these is a reason someone might choose to open an online savings account rather than a savings account at a traditional bank?

• Online savings accounts are FDIC insured to a higher limit

• Online savings accounts typically pay higher interest rates on deposits

• Online savings accounts are less likely to make you the victim of identity theft

• Online savings accounts are created specifically for people under age 25

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

You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?

• Your credit card company covers the cost

• It is deducted directly from your checking account

• Your credit card company provides you with a cash advance to cover the cost

• It is deducted directly from your savings account

Which of the following statements is an advantage of online banking?

• Once you set up online banking, your bank will waive overdraft, ATM, and monthly fees

• Using online banking allows you to earn a higher interest rate

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

• You can only shop online if your bank account has online banking features

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

• Daily

• Weekly

• Monthly

• Annually