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WorksheetsPersonal Financial Literacy Review
Total questions: 25
Worksheet time: 13mins
Which of the following is an effective strategy for personal saving?
Wait until the end of the month and save whatever is left in your checking account
Save a certain percentage of each paycheck and deposit it directly into a savings account
Cover all of your wants and needs and save whatever is left over
Take out a payday loan so you can save before you receive your paycheck
You are developing a savings plan and using short-, medium-, and long-term goals to motivate you. Which represents possible goals from short-term to long-term? Save for...
Retirement, a house down payment, college tuition
A new cell phone, college tuition, a house down payment
A new cell phone, dinner with friends this weekend, a new bike
Retirement, college tuition, a vacation
Fill in the blanks with the correct responses. If you follow the 50-30-20 rule of budgeting, you'll be putting 50% of your monthly income toward 30% of your monthly income toward and 20% of your monthly income toward
Needs, wants, savings
Savings, needs, wants
Needs, savings, wants
Wants, needs, savings
Three of these statements best describe a checking account. Which statement best describes a savings account?
This account offers a convenient way to pay bills and access cash from an ATM
This account pays you interest on money you have put away for later to help your money grow
This account is automatically debited when you use a debit card
This account typically allows an unlimited number of transactions per month
Which of the following statements about credit scores does this bar graph support? Average Score by Age Source: Credit Karma 710 690 670 650 630 18-24 25-34 35-44 45-54 55+
Credit scores tend to drop as you grow older because you are more likely to miss a payment at some point
It is more difficult for young people to borrow because they have less payment history for a lender to rely upon
When young people borrow, they are likely to have lower interest rates because their credit scores are lower
It is easier for young people to get loans at lower interest rates because they are likely to have never been late with a payment
All of the following would show up on a credit report EXCEPT...
Salary of your current job
Payment history of your car loan
Credit card payment history
Student loan activity
What benefits do you receive by taking out a loan with a cosigner?
You don't get penalized for late payments
You get a discount on future loans after this one is paid off
You have a better chance of getting approved and getting a lower interest rate if the cosigner has good credit
You automatically get the same credit score as the cosigner once the loan is paid off
Which response best completes the sentence 'It's best to begin establishing credit when you're young because'?
Accessing credit only becomes more expensive as you get older
Negative marks on your credit report go away faster for younger borrowers
Credit scores are free for anyone under the age of 25
You will likely need a credit history to rent your first apartment, finance your first car, or open an unsecured credit card
Which of the following is most likely to represent a fixed rate, secured debt?
A student loan
A credit card
A prepaid debit card
An auto loan
If you are having trouble making auto loan payments and are really following a tight budget, which recommendation below represents the WORST advice?
Find an extra source of income by taking a second job, working longer hours, or borrowing from family if they can afford to help
Stop making payments on some of your debts so you can focus on getting the most expensive or largest debts under control
Continue making all payments and call your lenders and see if you can negotiate lower monthly payments, lower interest rates, or longer terms
Explore whether a free or non-profit credit counseling service could help
Denise took out a payday loan for $300 in August. By February of the next year, she was able to pay back the loan, but she had spent a total of $750 doing so. What's the most likely story of how this happened?
The minimum monthly payment for payday loans is usually only $10 or $15, so a lot of interested accumulated
Upfront, Denise knew there would be $450 of fees attached to the loan, but she took out the loan anyway
Payday loans must be paid in full within two weeks, and if not, the only option is to renew the loan for a high penalty fee, which she did approximately 12 times
Denise not only paid the $300 she owed, but she prepaid an extra $450 in case she needs another loan in upcoming months
Which of the following statements is CORRECT about secured loans?
They are a good choice to use for student loans
If the borrower does not make payments, the lender can repossess the item
In the event of default, the borrower loses nothing except for the down payment
They usually have higher interest rates as compared with unsecured loans
Checking account maintenance fees:
Can also be known as a monthly service fee
Are usually withdrawn from your account each month
Can be waived if you meet certain requirements
All of the above
What is fiat money?
Bank money
Money in the form of gold or silver coins
Money by government decree
Privately owned, publicly controlled
You can easily carry money in a pocket or purse. This reflects what characteristic of Money?
Legal tender
Limited supply
Durability
Portability
You are holding a $1 bill. This is
Fiat money
Currency
A Federal Reserve note
All of the above
The three functions of money are
Store of value, measure of value, medium of exchange
Store of value, measure of value, foreign exchange
Store of value, measure of value, and scarcity
Store of value, measure of value, and limited supply
Which is a good synonym for the word barter in the term barter economy?
trade
Fiat
specie
monetary
A mortgage is a type of loan usually used to purchase a
Car
House
Business
All of these
The purpose of maintaining a good credit score is:
You can get more easily approved for housing
You can get a better cell phone contract with no security deposit
You can avoid security deposits on utilities
All of these are correct.
A debit card is
Life an ATM card, but you can also use it to make purchases at retail locations and funds are withdrawn directly from your checking account
The same as a credit card, buy now, pay later
Similar to a gift card from a retail store, since you buy the debit card and replenish the funds once a month
Only used to get cash from an ATM
Overdraft programs are
Free at all banks
Programs that banks offer in the event you overdraw your account
Required by law for bank customers to purchase
An account feature that you must pay for only in months when you do not keep a minimum balance in your account.
Your bank statement is
A printed record of the balance in your account
An indication of the deposits and withdrawals from your account
Issued periodically by your bank
All of these are descriptions of a bank statement
Most car loans are secured loans. This means that
They are repaid over a period of time
The interest rates on car loans are generally higher than those on other types of loans
They are co-signed by a guarantor who promises to repay if the borrower defaults
The lender can repossess the car if the borrower defaults
What is the relationship between your credit score and the interest rate you'll be charged for a car loan?
The higher your credit score, the lower the interest rate
The higher your credit score, the higher the interest rate
The lower your credit score, the lower the interest rate
There is no relationship between credit score and interest rate
