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WorksheetsManaging Your Money
Total questions: 40
Worksheet time: 20mins
A key difference between commercial banks and credit unions is that:
Commercial banks typically pay higher interest rates than credit unions.
Credit unions are more commonly located in rural areas while commercial banks are more commonly located in urban areas.
Commercial banks are ‘for-profit’ and credit unions are ‘not-for-profit.
Commercial banks offer more services, such as debit cards and online banking, than credit unions.
Since Taylor was a young child she has kept her savings in a piggy bank. She likes this method of saving because she can have immediate access to the money if she needs it. Recently, in a class at school, the discussion focused on why depository institutions are safer than her piggy bank. Some students’ comments were based on fact while others were based on myths. Which aspect of security at a depository institution is NOT TRUE?
Depository institutions have insurance protection. Depositors are insured no more than $100,000.
Depository institutions have insurance protection. Depositors are insured no more than $250,000.
All money stored at a depository institution is kept safe at all times by numerous security measures.
Information about depositors and their accounts is kept in secure data storage.
Sanjay is concerned about the safety of the money in his savings account. Which type of depository institution should he choose?
He could safely choose either a commercial bank or a credit union, as long as his savings account balance meets the insurance requirements.
A commercial bank, since his deposits would be insured by the Federal Deposit Insurance Corporation (FDIC)
A credit union, since his deposits would be insured by the National Credit Union Association (NCUA)
Neither a commercial bank nor a credit union. Money is most safely kept at home in a personal safe or vault.
Ariel is saving money to purchase a new computer before she leaves for college in two years. She wants to open a special account at a depository institution to keep her saved money safe. She has asked you for advice on which type of account would be best for her. What would be the best advice for Ariel?
Shop around for depository institution with the highest interest rates for their savings accounts. She would be able to make regular savings deposits and earn interest while she is saving up for the computer.
Check several depository institutions and choose one with a free, no-interest checking account. That way, when Ariel has saved enough for her computer she can simply write a check to pay for it.
Look for a Credit Union that offers share draft accounts. These secure accounts are designed especially for saving for long-term financial goals.
Shop around for a depository institution that offers safe deposit boxes. These accounts offer extra security for deposits and can be set up to allow her to withdraw her money when she needs it.
Savings tools offered by depository institutions may earn interest. Which of the following statements is NOT TRUE about interest?
Interest is the price paid for using someone else’s money.
When paying interest, look for low rates.
The amount of interest earned or paid is determined by the interest rate.
When earning interest, look for low rates,
Samantha wants to be able to use funds in her checking account but finds going to the bank to withdraw cash to be inconvenient. She would like a more effective way to access her checking account funds. What would you suggest she do?
Apply for mobile banking. That way she can access her money with her smartphone to pay for the things she needs. The amount she spends would automatically be deducted from her savings account.
Apply for a credit card. That way she can use the card to purchase the things she needs and pay for it when the credit card statement comes from her checking account.
Request a cashier’s check from her depository institution. That way she can spend money from her checking account without risk of an overdraft fee.
Apply for a debit card. That way she can use the card instead of cash to purchase the things she needs and the amount spent is immediately deducted from her account.
Common fees that may be charged by a depository institution include all EXCEPT:
Overdraft fee
ATM fee
Late fee
Minimum Balance fee
David made a mistake in his checking account record keeping and spent $10 more than he had deposited in his account. As a result, he can expect to be charged what?
Overdraft fee
ATM fee
Contact fee
Safe Deposit fee
Which statement is TRUE about Payroll Taxes?
Payroll taxes are paid are paid on both earned and unearned income.
Payroll taxes fund the Social Security and Medicare programs.
Payroll taxes fund different operations and programs of the federal government.
The amount of tax paid depends on many different factors but increases as income increases.
As Mariah was looking over her sales receipt for the shirt she bought at a retail store, she discovered that she was charged 6% more than the price tag shown for the item. What is this extra 6% charge most likely to be?
An excise tax on the shirt she purchased.
Sales tax on the shirt she purchased.
Property tax on the shirt she purchased.
Income tax on the shirt she purchased.
Who is Medicare designed to help?
Single parents
Low income families
Children of unemployed parents
Senior Citizens
Dane is researching the topic of property taxes for a presentation he is doing in his Personal Finance class. He has come across the following statements he is considering adding to his presentation. Which should he EXCLUDE from his presentation because it is not correct?
Property taxes are usually charged by state and local governments to pay for local schools and other services and expenses incurred by these governments.
Property taxes are assessed at the same rate for all types of property, including homes, land and building, regardless of location or whether they are used for business or personal use.
Property taxes are commonly paid on automobiles. This tax usually paid once per year when the automobile is licensed
Property tax on homes, land and buildings are usually only paid once or twice each year.
Which statement is NOT TRUE about property taxes?
The property tax rate is set by the federal government to be equal in every state.
Property tax is often charged by states or local governments to pay for local schools.
The fee paid to license a vehicle is an example of property tax.
Property taxes are most often paid only once or twice each year.
Taxes that are charged on consumption items such as gasoline, hotel rooms, and airline tickets are called _____________ taxes.
Sales
Federal use
Excise
Property
Austin has just received his first paycheck. He worked 22 hours at his new job and is being paid $8.00 per hour. He calculated that his paycheck should be $176. His paycheck amount is almost 1/3 less than he expected. What is the most likely reason that Austin’s pay is less than he expected it to be?
Austin neglected to deduct the excise tax paid on the uniforms he purchased to wear at his job.
Austin calculated the hours he worked without deducting the hours he spent doing on-the-job training.
Austin’s employer made a mistake calculating the number of hours Austin worked during his first pay period.
Austin neglected to deduct the amount required to pay income and payroll taxes.
Brett is creating a Statement of Financial Position and needs to list his assets. Which of the following should he NOT list as an asset?
Money in his checking account
His hockey equipment
The market value of his car
Money in the paycheck he will receive next week
To calculate her net worth Jordyn should use the following formula:
Assets – liabilities = net worth
Assets x liabilities = net worth
Assets + liabilities = net worth
Assets / liabilities = net worth
Maggie earns $62,000 per year and has a net worth of $20,000. Samantha earns $96,000 and has a net worth of $15,000. Who is wealthier?
Maggie, because her net worth is higher than Samantha’s.
Maggie, because her income minus her net worth is a smaller amount than Samantha’s
Samantha, because her income minus her net worth is a larger amount than Maggie’s.
Samantha, because her annual income is higher than Maggie’s.
Jonah is writing down his liabilities to complete his Statement of Financial Position. The item he should include would be:
The market value of his car
The value of his retirement account
The balance on his credit card
The combined total of his savings and checking accounts
To increase his net worth, Jackson could:
Increase his liabilities
Increase his assets
Decrease his assets
Increase his market value
Erin and her mother are putting together an Income and Expense Statement for Erin to use as she applies for a college scholarship. Which income source does she NOT need to include for this statement?
Interest earned on her savings account.
Taxes she paid based on her income last year.
Money she received from her grandparents for her birthday.
Social Security income her mother is receiving for her since her father died of cancer last year.
Which of the following would most likely be considered a contractual expense?
Food
Cell Phone
Food
Clothing
Andy is developing an Income and Expense Statement. He has gathered all his receipts, bank statements, paycheck stubs, and spending records. He needs to categorize them into income and expenses. Which should be recorded as expenses?
The scholarship he receives for studying Chinese at the local community college, his car insurance payment, and stock dividends he received from his grandmother
Clothing he purchased for a job interview, tuition for a class he is taking at the local community college, and interest from his savings account
Money saved from his paycheck for emergencies, interest paid on his car loan, his tax refund from filing last year’s tax return
Taxes deducted from his paycheck, money saved from his paycheck for emergencies, and his car insurance
Amanda and Marcus just finished their Income and Expense Statement for last month. They discovered that they have a net gain. What does this mean and what should they do?
Amanda and Marcus are spending more money than they are earning. They need to find a way to balance their income and expenses by spending less on non-contractual expenses
Amanda and Marcus are earning more money than they are spending. They could place additional money in savings and/or spend it on other expenses
Amanda and Marcus are spending more money than they are earning. One of them should consider getting a second job for a time to help boost their income.
Amanda and Marcus are earning more money than they are spending. They should increase spending for non-contractual items to bring their income into balance with the expenses.
If expenses were to exceed income on a spending plan, what would be a financially smart solution?
Decrease expenses
Use a credit card more often
Earn less income
Increase purchases
Diana and Aaron have decided to develop a spending plan to help them gain control over their finances. Which of the following statements is NOT TRUE about spending plans?
Spending plans are used to record planned income.
Spending plans are used to record planned expenses.
A spending plan includes items NOT usually included when creating a budget.
When creating a spending plan, it is recommended that you examine your trade-offs and opportunity costs.
When is your spending plan complete?
Spending plans are always under revision so they are never complete
When you have allocated all your income into categories for the month.
When you have all of your current income and expenses recorded
Spending plans are complete each December 31st as one year ends and another year begins
Chase has decided to work with a spending plan so he can build up an emergency fund for when he is in college. He learned in class that he could probably reduce his spending the most by looking at his non contractual expenses. Which of his expenses best fits that category?
Cell phone bill, gasoline, and car payment
Gasoline, food, and entertainment
Internet bill, entertainment, and clothing
Motorcycle payment, food, and cell phone bill
Michael wants to develop a spending plan for himself to use during his final year of high school. What will he need to do as his FIRST step?
Develop a control system that will work with his life style.
Decide how much money he can spend for each of the bills he pays each month.
Decide what income and spending categories would reflect his values, needs, and wants.
Track his current income and expenses. If he has already created an Income and Expense Statement then he has completed this step.
By accurately completing this form when you begin a new job, it can prevent you from overpaying taxes (allowing you to keep more money in each paycheck), and it can ensure you don’t have a big balance due at tax time.
Form W-2
Form 1040
Form 1099
Form A-4
The IRS recommends that you complete a new Form W-4 every time a major life event occurs, such as:
Marriage
All are correct
Birth of a child
Loss of a spouse
You should only receive a Form W-2 if you are:
An Employee
An Employer
Contractual Worker
Tax Preparer
What is the first step to take when getting ready to do your income taxes?
Sign your tax forms
Fill out IRS Form 1040
Submit your tax forms
Gather all your documents like W-2 statements, your Social Security number, any receipts, etc. that could affect your tax liability you owe the government.
What is progressive taxation?
The spending or disbursement of money
The form of taxation adopted by the U.S. that taxes its citizens based on their incomes, taxing the wealthy at a higher rate -- the higher your income, the higher your tax liability
A number that corresponds to the amount of tax withheld from your paycheck
An individual’s gross income minus specific deductions
Which of the following statements are true about allowances, related to the filing of income taxes?
An individual’s gross income minus specific deductions
The spending or disbursement of money
An allowance is a number that corresponds to the amount of tax withheld from your paycheck
The money allowances you claim, the less money is withheld from your wages for income taxes
Alyssa’s childcare provider called to tell her that the provider’s young daughter woke up ill and she won’t be able to care for Alyssa’s son today. Alyssa’s friend, who is a stay‐at‐home mother, agrees to care for Alyssa’s son today so Alyssa can go to work. Alyssa has utilized:
family child care
a non‐profit organization
social capital
neighborhood watch
Steven is moving into his first apartment in a few weeks and has been busy packing. In addition to the things he has purchased with money earned from his full‐time job, his parents have told him that he can take the furniture in his bedroom and his bedding when he moves out. His parents are providing him with which type of income?
In‐kind income
Earned income
In‐home income
Gift income
Which statement is true of government assistance programs?
Government programs were designed to provide permanent assistance to those in need.
The ultimate goal of government programs is for individuals to become self‐sufficient and independent.
Government programs were developed to help one specific socio‐economic group
All government programs vary from state to state.
Julie is a single mother who recently lost her job. She would like to obtain training in the medical field in order to increase her future income and support her two children. In order to do this, she will need help paying some of her expenses while she is going back to school. Which government program might offer her assistance to help with living expenses and job training?
Unemployment insurance
Earned income tax credit
Medicare
TANF
Medicare is provided by the Federal Government for individuals in specified circumstances. In which of the situations below would the individual most likely be receiving Medicare funds?
Rachel is a seventeen year old high school student who is pregnant and needs assistance with her medical expenses.
Ivan is 60 years old and was injured at work. His employer needs to provide temporary income for him
Rosie is 67 years old and in need of a health insurance program
Jim is a 37 year old man who lost his job and is unable to afford health insurance for himself or his children
