Mastering Financial Literacy Concepts

What is the primary purpose of a budget?

• To track your credit score

• To plan and control how you spend and save money

• To calculate your taxes

• To invest in the stock market

Which type of insurance covers damage to your car from a collision?

• Health insurance

• Collision auto insurance

• Life insurance

• Renters insurance

What is a checking account primarily used for?

• Long-term investments

• Everyday transactions like deposits and withdrawals

• Earning high interest

• Paying taxes

Which document do you typically receive from your employer to file your annual income taxes?

• W-2

• 1040EZ

• FAFSA

• 1099-DIV

What is the main purpose of a credit score?

• To determine your annual salary

• To measure your creditworthiness to lenders

• To calculate your insurance premium

• To track your investments

Which of the following is an example of a fixed expense in a budget?

• Groceries

• Rent

• Entertainment

• Clothing

Which of the following is a behavioral economics concept that describes the tendency to prefer immediate rewards over future gains?

• Compound interest

• Present bias

• Diversification

• Inflation

Which of the following is a federal student aid application required for most college financial aid?

• FAFSA

• W-4

• 401(k)

• Roth IRA

Which of the following is NOT a type of basic investment?

• Stocks

• Bonds

• Savings account

• Car insurance

Which of the following actions can help you build a good credit score?

• Paying bills late

• Maxing out your credit cards

• Paying your credit card balance on time

• Ignoring your credit report