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JA Financial Literacy: Theme Two

Total questions: 27

Worksheet time: 7hrs 45mins

Name
Class
Date
1.

What is the main difference between a bank and a credit union?

a)
Banks exist to make a profit; credit unions re-invest profit to benefit members.
b)
Banks offer higher-yield interest rates than credit unions.
c)
Unlike banks, credit unions do not have online banking.
d)
More services are offered by banks than by credit unions.
2.

Sasha needs a bank that is open 24/7 and accessible overseas. Which bank should she choose?

a)
Local credit union
b)
Internet bank
c)
International financial institution
d)
Savings and loan
3.

Why are higher-interest checking and savings accounts preferable?

a)
They give you more checks.
b)
They hold and transfer money and offer different ways to pay.
c)
They speed up your rate of return.
d)
They take longer to earn you additional money.
4.

Which of the following is not a method of payment using a checking account?

a)
EFT
b)
Debit card
c)
Credit card
d)
Personal check
5.

Adding a fixed amount to your savings each month to have in case of emergency or to save for the future is called:

a)
Pet insurance fund
b)
Paying yourself first
c)
A slush fund
d)
401k retirement fund
6.

If $500.00 is placed in a savings account paying 10 percent per year compounded annually, what will the account balance be at the end of the year?

a)
$550.00
b)
$552.36
c)
$505.00
d)
$600.00
7.

The highest-value alternative given up when a choice is made due to scarcity is:

a)
Opportunity cost
b)
Scarcity cost
c)
Discretionary cost
d)
Second best
8.

The Rule of 72 is a method to determine:

a)
The annual interest rate
b)
How many months it will take to save the target amount
c)
The time it will take an amount to double in value
d)
The initial amount you should invest
9.

How is a person’s net worth determined?

a)
It is a projection of their lifetime earnings.
b)
It is their net income multiplied by their annual percentage rate.
c)
It is their total assets combined with the amount in their bank accounts, minus debts.
d)
It is their monetary net worth divided by their debts.
10.

What is the purpose of a transaction register?

a)
To record checks that have been written
b)
To keep a running balance of your bank account
c)
To keep track of all your deposits, payments, and purchases
d)
All of the above
11.

What is an advantage of being a careful consumer?

a)
Getting the best price on purchases
b)
Making the most of your money
c)
Always buying things on sale
d)
All of the above
12.

Which of the following is NOT a method used by careful consumers?

a)
Making a shopping list
b)
Comparing stores and prices on an item
c)
Buying a random item that is offered on special discount - today only
d)
Looking for bargain brands and bulk pricing
13.

What does the acronym for SMART Goals stand for?

a)
Specific, Measurable, Achievable, Relevant, Time-Bound
b)
Standard, Measurable, Accurate, Relevant, Task-Oriented
c)
Specific, Money-making, Achievable, Responsible, Time-Bound
d)
Standard, Money-making, Accurate, Responsible, Time-Bound
14.

Which of these is NOT a way to increase your net worth?

a)
Get a higher-paying job to increase your income
b)
Pay off loans to lower your debt
c)
Earning money through investments
d)
Spending more money than you have
15.

When creating a budget, what does "fixed expenses" refer to?

a)

Expenses that vary from month to month

b)

Expenses that are the same every month

c)

Expenses that are only paid once a year

d)

Expenses that can be changed easily

16.

What does it mean to "live within your means" when budgeting?

a)

Spending more money than you earn

b)

Spending less money than you earn

c)

Not having a budget at all

d)

Borrowing money excessively

17.

Which of the following shows negative cash flow?

a)
Net income $580.00; expenses $470.00
b)
Gross income $1,332.00; expenses $1,554.00
c)
Yearly expenses $50,321.00; yearly income $56,000.00
d)
None of the above
18.

What is the first step in budgeting?

a)
Calculating net monthly income
b)
Acquiring employment
c)
Finding a good budget app
d)
Examining cash flow
19.

Which of the following would be considered a short-term savings goal?

a)
Saving for college
b)
Buying a used car
c)
Paying to attend the regional championships
d)
Buying a house
20.

To balance a budget, it is important that:

a)
Fixed expenses are greater than variable expenses
b)
Income exceeds expenses
c)
Expenses are sorted into categories
d)
Transportation costs are approximately 12 percent
21.

How can you increase your savings according to a budget?

a)

Spend more than you earn

b)

Save whatever money is left over at the end of the month

c)

Decrease expenses and increase income

d)

Ignore financial goals

22.

Which of the following is NOT a recommended method for reducing expenses in a budget?

a)

Cutting out unnecessary subscriptions

b)

Eating out frequently

c)

Using coupons when shopping

d)

Carpooling to save on gas

23.

Which of the following is an example of a long-term financial goal?

a)

Saving for a vacation next summer

b)

Paying off student loans within ten years

c)

Buying a new phone next month

d)

Building an emergency fund within six months

24.

What does it mean to "pay yourself first" in budgeting?

a)

Spend all your money before saving any

b)

Save money only when you have excess funds

c)

Prioritize saving by setting aside money before paying bills or spending

d)

Invest in high-risk ventures without considering savings

25.

Which of the following is an example of a financial risk?

a)

Putting money in a savings account

b)

Investing in a diversified portfolio

c)

Taking out a high-interest loan

d)

Creating a budget

26.

Which of the following is a characteristic of an effective budget?

a)

It is rigid and does not allow for adjustments

b)

It does not include any savings categories

c)

It is flexible and can adapt to changes in income or expenses

d)

It focuses solely on short-term financial goals

27.

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

a)

Grocery bills

b)

Entertainment expenses

c)

Rent or mortgage payments

d)

Dining out