Personal Finance Final Review

What is the primary purpose of creating a personal budget?

• To track daily expenses

• To plan for future financial goals

• To increase credit score

• To reduce taxes

Which of the following is considered a low-risk investment?

• Stocks

• Bonds

• Real estate

• Cryptocurrency

What is a credit score primarily used for?

• To determine tax rates

• To assess loan eligibility

• To calculate net worth

• To set insurance premiums

What is the benefit of starting to save for retirement early?

• Higher interest rates

• More time for compound interest to grow

• Lower taxes

• Increased social security benefits

Explain how a high credit score can impact loan interest rates.

• It increases the interest rates

• It decreases the interest rates

• It has no effect on interest rates

• It only affects the loan amount

Develop a plan to improve a credit score from 600 to 750.

• Pay bills on time, reduce credit card balances, and avoid new hard inquiries

• Open multiple new credit accounts

• Close old credit accounts

• Max out credit cards

Compare the benefits of a Roth IRA versus a traditional IRA for retirement savings.

• Roth IRA offers tax-free withdrawals; traditional IRA offers tax-deductible contributions

• Roth IRA offers tax-deductible contributions; traditional IRA offers tax-free withdrawals

• Both offer tax-free withdrawals

• Both offer tax-deductible contributions

Which of the following is an example of the Attainable element of a SMART goal?

• Saving for a new pair of shoes

• Saving $5,000 for a used car

• Saving $250 per month to meet your savings goal

• Reducing credit card debt by $1,000.

Which of the following is an example of the Measurable part of a SMART goal?

• Planning to reach your goal in 6 months

• Planning to save $5,000 total

• Saving money for an emergency fund

• Reducing spending on wants

Which of the following is an example of non-monetary compensation?

• Health insurance

• Paid time off

• Retirement benefits

• All of the above