WorksheetsPersonal Finance Knowledge
Total questions: 50
Worksheet time: 25mins
Name
Class
Date
1.
You see on a commercial that OrangeCo is offering a credit card with a 5% cashback program for all cardholders. Which question might help you evaluate how good this offer is?
a)
Does the cashback program apply to all purchases or only specific types of purchases like gas and groceries?
b)
Can I get a debit card along with a new credit card?
c)
Who does OrangeCo use as their spokesperson in the commercial?
d)
Do I still get the cash back even when I return my purchases to the store?
2.
Fill in the blanks with the correct responses. If you follow the 50-20-30 rule of budgeting, you'll be putting 50% of your monthly income toward _______________, 20% of your monthly income toward _____________, and 30% of your monthly income toward ______________.
a)
Needs, wants, savings
b)
Wants, needs, savings
c)
Needs, savings, wants
d)
Savings, needs, wants
3.
Which one of these expenses most likely represents a VARIABLE cost in someone's budget?
a)
Car insurance premium
b)
Student loan payment
c)
Rent
d)
Electricity bill
4.
Which of these statements best explains why it's often a good idea to pay more than the monthly amount due on an amortized loan?
a)
Amortized loans typically have much higher interest rates than credit cards, so they're the best place to put your extra cash.
b)
Every time you pay extra, the lender will reduce the interest rate they're charging by a small amount.
c)
The extra payment will be applied to the interest you owe, which will reduce the overall cost of your loan.
d)
The extra payment will be applied to the principal amount you owe, which will pay down your debt more quickly
5.
Which description is most accurate for a Zero-Based Budget?
a)
You spend your checking account balance down to $0 every month
b)
You spend your saving account balance down to $0 every month
c)
You pay every one of your debts down to $0 every month
d)
You put every dollar of your take-home pay into a budget category each month
6.
Which of the following statements about banks is FALSE?
a)
Historically, savings accounts earn higher returns than investments in the stock market
b)
Many banks pay interest on the money you deposit with them
c)
If it is FDIC-insured, your money is safe even if the bank fails
d)
Money in a bank is usually easy to access via ATM, debit card or check
7.
Lance is at the grocery store and has three options for buying boxed mac and cheese: 1 box for $1.78, a 3-pack for $6, or a 4-pack for $8. Comparing unit costs, which statement is true?
a)
A 4-pack is the best deal
b)
Lance will save the most if he gets one of each -- a single box, a 3-pack, and a 4-pack
c)
A single box is the best deal
d)
A 3-pack is the best deal
8.
You are putting together your first post-graduation budget. Your take-home pay will be $2,500 per month. You estimate your monthly costs to be rent of $800, car payment of $350, car insurance of $150, car maintenance of $50, entertainment of $500, food expense of $250, mobile phone of $75, student loan payment of $225 and other expense of $300. How would you describe your budget after analyzing all of your income and expenses?
a)
You have a surplus of $5,200
b)
You have a surplus of $200
c)
You have a deficit of $2,700
d)
You have a deficit of $200
9.
Which of the following is an effective strategy for personal saving?
a)
Save a certain percentage of each paycheck and deposit it directly into a savings account
b)
Wait until the end of the month and save whatever is left in your checking account
c)
Cover all of your wants and needs and save whatever is left over
d)
Take out a payday loan so you can save before you receive your paycheck
10.
You are interested in renting an apartment for your senior year in college. You meet with the landlord, complete the application, and after checking your credit background and references, the landlord approves your application. In most cases, you will need to provide the landlord with _________ at the time you sign the lease in order to get the apartment.
a)
First month's rent and a security deposit
b)
Rent payment for the first three months
c)
An additional list of references and copies of your last three tax filings
d)
A $500 bonus payment for awarding you the apartment
11.
A credit card offer comes in the mail with the bold print "0% A.P.R. for New Accounts." Which important piece of information should you find before thinking about signing up?*
a)
What is the A.P.R. after the introductory period?
b)
What kind of designs can I get on my card?
c)
Can I pay my credit card bill online?
d)
Can I get two or more cards with this offer?
12.
Each of the following is an advantage to leasing a car EXCEPT?
a)
Leases allow you to get a newer model car more frequently than the typical car loan would.
b)
Monthly leases are frequently lower than a car payment would be on a loan for the same car.
c)
Lease payments are not reported to the credit agencies, so it's not as bad to miss a payment or two.
d)
Leases are typically short enough that the car stays under warranty for many repairs or service appointments.
13.
Which person's income will show an increase in the next pay period?
a)
Marquis, a marketing manager, who works three hours Thursday night so his presentation the next day is perfect
b)
Chelsea, a city bus driver, who works two extra shifts to cover for a sick coworker
c)
Ralph, a self-employed furniture maker, who works both weekend days to increase his inventory
d)
Becca, a tenth grade teacher, who stays after school each day to grade papers
14.
What financial product am I? I am a type of credit card that requires cardholders to make a security deposit equal to the credit limit on their account. Due to this deposit requirement, I am often a good choice for young people looking to establish their credit history.*
a)
Standard credit card
b)
Rewards credit card
c)
Secured credit card
d)
Overdraft credit card
15.
One way the grocery store tricks you into spending more money than you budgeted for is..
a)
Accepting digital and print coupons
b)
Putting high priced items at eye level and lower cost items above or below eye level
c)
Being open early in the morning and late at night
d)
Paying their cashiers and baggers more
16.
Elizabeth is considering buying a $30,000 car. Which financing option would have the LOWEST expected monthly payment and the HIGHEST expected total interest payments?
a)
$0 down payment, 6% interest, 60 months
b)
$3000 down payment, 0% interest, 36 months
c)
$0 down payment, 6% interest, 84 months
d)
$3000 down payment, 6% interest, 60 months
17.
Which car loan term will save you the most money?
a)
24 months/$300 a month
b)
12 months/$350 a month
c)
72 months/$150 a month
d)
36 months/$200 a month
18.
Which statement is TRUE about the job board posting shown here?
a)
AutoNation will provide this employee with multiple types of insurance in their benefits package
b)
This job has a lot of flexibility on work hours and the ability to work from anywhere
c)
The job is for an account specialist to work at Indeed
d)
Whoever is hired can expect to make $110,000 per year
19.
When renting an apartment, why is it important to have a written lease?
a)
Signing a lease provides you with free or discounted renters insurance
b)
Without a lease, a renter won't know how much to budget for rent, food, insurance, or transportation
c)
A lease clearly states the apartment costs and expectations for living there
d)
It is against the law to live somewhere without a lease
20.
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…
a)
Retirement, a house down payment, college tuition
b)
A new cell phone, college tuition, a house down payment
c)
Retirement, college tuition, a vacation
d)
A new cell phone, dinner with friends this weekend, a new bike
21.
Each of the following financial products will help you build credit history EXCEPT:
a)
Home mortgage
b)
Debit card
c)
Secured credit card
d)
Credit card
22.
Which of the following statement is TRUE?
a)
The majority of Americans have an adequate emergency fund.
b)
The majority of Americans have an adequate emergency fund, but do NOT have sufficient amounts of money saved for retirement.
c)
The majority of Americans do NOT have an adequate emergency fund or sufficient amounts of money saved for retirement.
d)
The majority of Americans have sufficient amounts of money saved for retirement.
23.
Ashton needs to get his car fixed in order to get to work, and he doesn't have an emergency fund or enough cash in his account to pay for the repair, which costs $975. Which option below is likely the WORST financial decision to solve his problem?
a)
Take out a payday loan
b)
Obtain a loan through a peer-to-peer lending website
c)
Take out a home equity loan
d)
Put the repair on his credit card
24.
Herd mentality may explain why...
a)
Mason went to see a movie with his friends even though he didn't like the genre
b)
Davona chose to skip dinner with her friends and watched a movie at home instead
c)
Akshay bought a shirt he liked from an unpopular brand
d)
Ginnifer decided to keep her current phone even though her closest friends bought the new version
25.
Which location is likely to have the HIGHEST cost of living?
a)
A city thats' crime rate is high and population has decreased in the last 3 decades
b)
A thriving city with a growing health care sector, pro sports teams, and good public transportation
c)
A rural area with a population of 6000 people
d)
A college town located 5 hours from the nearest big city
26.
What statement about credit cards is TRUE?
a)
As long as you make the minimum payments it's like getting a short-term interest free loan
b)
They can help you establish a credit history
c)
Since they are tied directly to your checking account, they prevent you from spending money you do not have
d)
If you need to carry a balance, the interest rates are generally quite low (less than 5%)
27.
Which statement best describes the difference between saving and investing?
a)
Saving is done with small amounts of money, and investing is done with large amounts of money
b)
Saving protects your money from inflation while investing does not protect your money from inflation
c)
Saving is for low-income people, while investing is for rich people
d)
Saving goes into an FDIC insured bank while investing typically goes into stock or bond markets
28.
Joelle wants to have an emergency fund to cover 6 months of her expenses. Her monthly gross pay is $4,000 and her monthly expenses are $2,000. If she plans to save 10% of her gross pay each month, how long will it take her to build her emergency fund?
a)
9 months
b)
3 months
c)
24 months
d)
30 months
29.
Sadie is a freelance social media specialist. Companies can hire her to improve their social media presence. Why is it particularly important that Sadie, and other freelancers like her, have an emergency fund?
a)
Freelancers charge a very low hourly rate, so Sadie probably doesn't get paid much
b)
Sadie's job requires a lot of expensive specialty equipment that will always need replacing
c)
Sadie doesn't have guaranteed work every day, so she needs money in case she goes a while between clients
d)
Sadie will need a large emergency fund in order to make her monthly insurance payments
30.
Based on the Card Statement below, how much credit does this cardholder have available to use?*
a)
$523.20
b)
$2100
c)
$0
d)
$2576.80
31.
Experts recommend that you accumulate enough to cover 3 to 6 __________________ of expenses in your emergency fund.
a)
Years
b)
Weeks
c)
Months
d)
Days
32.
For most Americans, which budget expense category is largest?
a)
Clothes
b)
Food
c)
Housing
d)
Transportation
33.
If Linus is following a 50/30/20 Budget and takes home $1000 per pay period, how much is he budgeting for his WANTS?
a)
$500
b)
$200
c)
$1000
d)
$300
34.
Which of the following scenarios BEST demonstrates FOMO (Fear of Missing Out)?
a)
Angela sees an advertisement for a pair of shoes and decides to buy them
b)
David goes on a vacation to Europe and posts about it on social media every day
c)
Megan takes a baking class after seeing a sign for the class at her favorite bakery
d)
José wants to go see a movie that all of his friends have seen and are raving about
35.
How is gross pay different than net pay?
a)
Gross pay is the total you earned, while net pay has taxes deducted
b)
Gross pay is used for spending, while net pay is used for budgeting
c)
Gross pay is for hourly workers, while net pay is for salaried employees
d)
Gross pay is always lower, while net pay is always higher
36.
You overhear your Aunt Tina tell your mom that she, her husband, and their kids are "living paycheck to paycheck." What does Aunt Tina mean by that?
a)
Aunt Tina and her family don't have any money saved, and their paychecks are just barely covering monthly expenses, so they use every dollar every month
b)
Aunt Tina and her family have high paying jobs and don’t worry much about money
c)
Aunt Tina uses her paychecks as income to deposit into her checking and savings accounts
d)
Aunt Tina gets a paycheck one month, and her husband gets a paycheck the next month; they alternate pay periods
37.
Which of these is an example of "Keeping up with the Joneses?
a)
Option Buying plane tickets for vacation well in advance so that you'll benefit from cheaper prices
b)
Applying to the top colleges, to see if you'll get accepted & what financial aid packages they'll offer
c)
Buying new sneakers the day they come out, because you know others in your class will have them, too
d)
Saving for retirement as soon as you graduate college, to take advantage of compounding interest
38.
Three of these statements best describe a checking account. Which statement best describes a savings account?
a)
This account offers a convenient way to pay bills and access cash from an ATM.
b)
This account typically allows an unlimited number of transactions per month.
c)
This account is automatically debited when you use a debit card.
d)
This account pays you interest on money you have put away for later to help your money grow.
39.
You want to take earnings from your part-time job to pay for a new laptop. Your monthly take-home pay is $500 and the laptop costs $1,200. What percentage of your pay do you need to save in order to buy the laptop in 12 months?
a)
15%
b)
20%
c)
5%
d)
10%
40.
Juan saved $1,000 from his summer job cleaning pools. Which of these savings vehicles would work best for him if he doesn't need access to the money for a number of years AND wanted to earn the highest interest rate?
a)
Money Market account
b)
Certificate of Deposit
c)
Regular savings account
d)
Checking account
41.
Which of these credit card payback strategies would result in your paying the HIGHEST amount of interest?
a)
Paying off your credit card bill in full every month
b)
Making the minimum payment (3% of your credit card balance) every month on time
c)
Paying 20% of your credit card balance every month on time
d)
Making the minimum payment (3% of your credit card balance) every month with an occasional late payment
42.
If you are trying to substantially reduce the amount you spend on food, you should try...
a)
Drinking more coffee and soda so you are not as hungry for food
b)
Eating way more snacks on the go and way fewer meals at home
c)
Cooking your own food at home for as many meals as possible
d)
Dining at restaurants more often so you don't waste water doing dishes
43.
When a bank says their savings account earns 1% interest, that typically means you will earn 1% interest over what period of time (Note: this is not referring to the compounding frequency or frequency of interest payment)?
a)
Annually
b)
Quarterly
c)
Daily
d)
Monthly
44.
Which represents the best time to start saving for your retirement?
a)
Right after you pay off your student loans
b)
As soon as you graduate and have your first full-time job
c)
Once you are debt-free, including paying off all credit cards, auto loans, and your mortgage
d)
At age 45, so you have exactly 20 years until retirement
45.
Bryan is a great cook. As his job, he books gigs cooking customers breakfast or dinner in their own homes on the app Cook You Dinner. Who provides Bryan's health insurance and retirement plan?*
a)
The owners of the Cook You Dinner app
b)
Bryan has to fund them himself
c)
Each family he cooks for
d)
The Google and Apple app stores
46.
What is meant by the term “impulse shopping?”
a)
Shopping online instead of in stores
b)
Using your emergency fund, rather than your checking account, to make a purchase
c)
Comparison shopping for more expensive items while doing less work to compare cheaper products
d)
Buying an item without giving it much thought, maybe because it’s on sale or you see it and simply love it
47.
A website tells you, "Only one left!" while shopping online. Which loss aversion strategy is this website using?
a)
Scarcity and urgency
b)
Free trials and samples
c)
Buy now, get free shipping
d)
Coupons
48.
Which of the following statements explains what gross and net pay are on a paystub from your employer?
a)
Gross pay is the total wages you've earned for the pay period, and net pay is smaller because taxes have been removed
b)
Gross pay is the total wages you've earned, and net pay is the total amount in taxes you've paid
c)
Gross pay is the total wages you've earned with any taxes and contributions removed, and net pay is larger to include all your benefits
d)
Gross pay is the total wages for just this pay period, and net pay is total wages for the entire year to date
49.
What action corresponds to the advice "Pay yourself first?
a)
Wait until the end of the month to determine how much you have leftover to save
b)
Become self-employed so you're paying yourself instead of being paid by an employer
c)
Set aside a fraction of your paycheck into a savings account before you start spending
d)
Spend your regular paycheck on needs and wants but funnel any extra money into saving
50.
Which of the following statements comparing credit and debit cards is TRUE?
a)
Credit cards pull money directly from your bank account, while debit cards get their money from Visa or Mastercard
b)
With debit cards, you're spending your own money at point of sale, while with credit cards, you're promising to pay back the money
c)
Credit card companies provide you with a monthly statement, while debit cards do not
d)
Far more businesses accept credit cards than debit cards
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