Financial Literacy Benchmark 1

What is the primary purpose of creating a budget?

• To determine how much debt you can accumulate.

• To track income and expenses to ensure financial stability.

• To find ways to spend money on luxury items.

• To avoid paying taxes.

Which of the following is classified as a "need"?

• Streaming service subscription

• Monthly rent payment

• Dining out at restaurants

• Designer clothing

Which of the following is classified as a "want"?

• Groceries

• Utility bills

• Car insurance

• Vacation travel

Gross pay refers to:

• The amount of money earned before deductions.

• The amount of money left after deductions.

• The amount of money in your checking account.

• The amount of money needed to cover expenses.

Net pay refers to:

• The total amount of money earned before deductions.

• The amount of money paid in taxes.

• The amount of money left after all deductions are taken out.

• The amount of money spent on bills.

A checking account is primarily used for:

• Long-term investments.

• Storing cash for emergencies.

• Day-to-day transactions and managing expenses.

• Earning high interest on savings.

Which of the following is NOT a common way to deposit money into a checking account?

• Direct deposit from an employer

• Depositing a check at an ATM

• Wiring money to an investment account

• Mobile check deposit using a smartphone app

Which of the following is NOT a common way to withdraw money from a checking account?

• Using a debit card at an ATM

• Writing a check

• Transferring funds to a savings account

• Making a deposit at a bank branch

One advantage of opening a checking account at a credit union is:

• Higher fees compared to traditional banks.

• Lower interest rates on loans and credit cards.

• Limited access to branches and ATMs.

• Lack of customer service.

One disadvantage of opening a checking account at a credit union is:

• Higher interest rates on savings accounts.

• Limited access to branches and ATMs.

• More personalized service.

• Lower fees compared to traditional banks.