Personal Finance Quiz

According to the 50/30/20 budgeting rule, what percentage of after-tax earnings should be allocated to needs?

• 20%

• 30%

• 40%

• 50%

Which of the following is the best way to protect against phishing scams?

• Share your password with trusted friends

• Click on links to verify your account information

• Never answer phone calls from unknown numbers

• Verify the source of emails and links before clicking

What is a key characteristic of a SMART financial goal?

• It must involve stock market investments

• It must be completed within one month

• It must be measurable and time-bound

• It must require borrowing money

What is the primary purpose of a bank statement reconciliation?

• To increase your credit score

• To verify transactions and detect errors or fraud

• To calculate interest earned

• To set up automatic payments

According to the text, what is the average student loan debt in America as of 2019?

• $25,290

• $32,731

• $40,940

• $50,900

What should be your first financial goal according to the text?

• Maximizing credit card rewards

• Investing in cryptocurrency

• Having income greater than expenses

• Buying real estate

Which of the following is NOT a mandatory deduction from a paycheck?

• Federal income tax

• Social Security tax

• Health insurance premiums

• FICA (Federal Insurance Contributions Act)

In health insurance, what is the difference between a deductible and an out-of-pocket maximum?

• They are the same thing with different names

• A deductible is paid monthly while out-of-pocket maximum is paid annually

• A deductible must be met before insurance pays, while out-of-pocket maximum is the most you'll pay in a year

• Out-of-pocket maximum applies only to prescriptions while deductible applies to all services

What is a key advantage of owning a home versus renting?

• Lower maintenance costs

• More flexibility to move

• Building equity in a valuable asset

• Fewer responsibilities for repairs

Which of the following is a characteristic of a 401(k) retirement plan?

• It is entirely funded by the employer

• Withdrawals are taxed at the same rate as when contributed

• Contributions are made with pre-tax dollars

• It can only be used for medical expenses