Financial Literacy Check-in: Unit 1 & 2

When it comes to personal savings, what does the acronym PYF stand for?

• Prepare Your Future

• Pay Your Friends

• Pay Yourself First

• Prepay Your Finances

List three things you learned about saving and investing. (You must include 3 things to get credit)

Which of the following is NOT considered a Short-Term savings option?

• Savings Account

• Certificates of Deposit

• Money Market Account

• 401(k)

Which of the following is considered a Long-Term option? (select all that apply)

• Bonds

• Stocks

• Mutual Funds

• CDs

A saver who wants her savings insured by the FDIC (Federal Deposit Insurance Corporation) wants to use this savings option.

• Stocks

• Bonds

• Mutual Funds

• Savings Account

This type of investment is essentially an IOU with a set rate of return. The issuer promises to pay the buyer a certain sum of money at the end of a stated period plus interest payments at specific intervals. This type of investing doesn't represent ownership in the corporation, government agency, or utility borrowing the money.

• Money Market Account

• Stock

• Bond

• Certificate of Deposit

Organize these options into the right categories

Groups:

(a) True

,

(b) False

• Stocks are insured against loss by most banks and credit unions.

• Interest is the fee received for the use of money.

• The higher the probability that an accident will happen, the higher the insurance premium.

• A long-term investment usually means an investment period of up to three months.

• Automatically reinvesting your stock dividends increases your investment.

• Investing in a single stock is the safest way to grow your wealth.

Protection against risk (peace of mind) is the primary reason people purchase this type of policy.

• Auto insurance

• Health insurance

• Home insurance

• All of the above

Organize these options, about owning a health insurance policy, into the right categories

Groups:

(a) Benefit

,

(b) Drawbacks

• health care insurance is expensive

• regular health care and medicine

• you may be denied coverage of have limitations on services

• some or most of your hospitalization and/or surgery bills may be covered

• you pay for something you may never use

• deductibles and co-payments usually apply

When Michael B. Jordan was born, his parents started saving money for college in a special account called a 529 Savings Plan. When he was younger, Michael wanted to be a brain doctor. But after he finished high school, he changed his mind and decided to use the money to move to Hollywood and become an actor.

Which of the following best explains what might happen because of his choice?

• since the money will not be used for educational expenses, he will be charged taxes on the money

• he may end up homeless and hungry because becoming a successful actor is not guaranteed

• he will regret not going to medical school

• thanks to the money from the savings account, he will not have to worry about finding a job for a while