WorksheetsEPF Final Exam SP '24
Total questions: 100
Worksheet time: 1hrs 5mins
Making the right choices with your money—managing your money—involves knowing how . . .
Planning, saving, spending, and investing will define your financial portfolio
To make bank deposits using registers with the appropriate transactions listed
Consumer decisions will affect your accounts
Earning, budgeting, saving, spending, and giving affect your money
You should always make sure you have a…
Budget
Credit Line
Direct Deposit
Credit Card
What is The First Foundation?
Pay cash for college.
Build wealth and give.
Save a $500 emergency fund.
Open a checking account.
A money principle to keep in mind is to live on ___________________ you make.
Exactly 20% below what
More than
The same as
Less than
Personal finance is 20% _____________ and 80% _________________.
Head knowledge; behavior
Behavior; head knowledge
Cause; effect
Reactions; behaviors
A _________________ financial goal takes up to two years to reach.
Five-level
Short-term
Medium-term
Long-term
What is The Fifth Foundation?
Pay cash for your car.
Get out and stay out of debt.
Find a financial professional.
Build wealth and give.
What is financial literacy?
The content provided in bank statements for consumers
The knowledge and skill base necessary for people to be informed consumers and manage their finances effectively
The curriculum provided to college students about finances for their degrees
The skills to read financial documents for personal finance classes, goals, and statements
To know your net worth, subtract your liabilities from your ______________.
Other liabilities
Net income
Previous net worth
Assets
To gain an understanding of your personal finances, you should know . . .
Your financial goals
Where you stand financially, how much income you have, what goals you want to set, and how you’ll reach those goals
How much income you have
Your investment portfolio and your financial advisors’ contact information
What are the Four Walls?
Utilities, college fund, restaurants, and car insurance
Cell phone bill, car insurance, shelter, and money for the movies
Food, utilities, transportation, and college fund
Food, utilities, shelter, and transportation
How often should you create a budget?
Daily
Weekly
Monthly
Biannually
How many months does it usually take for your budget to start working as a budget should?
Three
Five
Four
One
Going to the movies is an example of what types of expenses?
Intermittent and variable
Discretionary and variable
Discretionary and fixed
Intermittent and fixed
Net income is the amount you get paid before taxes.
True
False
What kind of money counts as income?
Only the money you make at your job
All money that you receive, including money from your job and gifts like birthday money
Money in your savings account
Only money deposited into your bank account
What should you do if you overspend in one category of your budget?
Adjust your budget by removing money from other spending categories.
Just leave it. It will probably work out fine.
Take money from the Giving category. You're giving to yourself!
Ask a friend for the money you overspent.
The primary reason people don't budget is because they lack the behavior to stick to a budget.
True
False
Why is budgeting so important?
It's a good way to make sure all your money is spent by the end of the month.
It helps you figure out the best way to justify purchases that maybe aren't necessary.
It gives you control of your money and sets you up for financial success in the future.
It helps you brush up on your math skills.
45% of Americans have less than $1,000 saved for a(n) ___________.
Emergency
Car
Retirement Fund
New Smartphone
Once you have a $500 emergency fund, you should . . .
Start putting it toward debt
Invest it in the stock market to grow your money
Save it until you have an emergency
Use the money to pay for health insurance
The interest rate on a savings account determines . . .
How much money you need to have to open the account
How much you will pay the bank to manage the account
The amount of time your money will be in the account
How quickly your money will grow over time
Compound interest is earned at a fixed rate, while ___________ is an average based on an investment's past performance.
The principal
Interest rate
The Fifth Foundation
Compound growth
What is the goal of an emergency fund?
To pay for large purchases
To save for your children's college expenses
To have cash on hand for unexpected events
To pay for health insurance
Once you're out of school, have started your career, and have zero debt, your emergency fund should have .
3–6 months of income
3–6 months of living expenses
$3,000
$5,000
What is the Third Foundation?
Pay cash for your car.
Pay cash for college.
Save for retirement.
Create a monthly budget.
Which of these would count as a legitimate reason to use your emergency fund?
You forgot to budget for your mom's birthday gif
You have a fancy event coming up but you already spent all of your Clothing budget category
The smartphone you've wanted just went on sale
Your car battery died
The amount of interest charged on a debt but not yet collected is called . . .
Accrued interest
Interest rate
Same-as-cash
Growth rate
Banks and lenders use credit scores to determine . . .
The likelihood that someone is able to repay debt
A person's financial responsibility
How much collateral someone has available to put up for a loan
How successful someone is
Making purchases with a credit card means that you're borrowing money with interest, and ___________________ pay much higher interest rates.
Young people
Rich people
Old people
College graduates
__________________ require the borrower to put up collateral for the loan.
Unsecured loans
Interest rates
Revolving credit
Secured loans
Leasing a car is a method of financing where someone ____________________.
Makes monthly payments on but does not own the vehicle
Is paying off two or more vehicles at one time
Does not have to pay any taxes on the vehicle for the first six months
Never pays any interest or fees
What is The Second Foundation?
Get out and stay out of debt
Save a $500 emergency fund.
Pay cash for your car.
Build wealth and give.
Which is an example of an appreciating asset?
A computer used for business purposes
A new car purchased within the past 6 months
A piece of farming equipment
A home
The debt snowball method involves . . .
Waiting until the winter months to begin paying off debt
Paying off debts from largest to smallest
Pooling together money from other people to pay off your debt
Paying off debts from smallest to largest
The smartest way to buy a car is to ___________________ .
Lease it
Finance it but pay the debt as quickly as you can
Take out a personal loan for it
Pay for it in cash
A car is a depreciating asset.
True
False
An example of discretionary spending is ____________.
Utilities and food
Transportation
Monthly rent
Nonessential goods and services
What does it mean to develop power over purchase?
You are powerless in the face of an impulse purchase.
You can make decisions very quickly when it comes to purchasing items.
You are able to slow down and think through your motives before buying something.
You have power to purchase whatever you want, and you do so.
Americans spend over $2,100 a year on ___________________.
Impulse purchases
Entertainment
Groceries and eating out
Credit card fees
It's your right as the consumer to . . .
Pitch a fit if you don't like the product you just purchased, and demand a refund
Buy whatever you want, as long as you don't go into debt over it
Expect a product to live up to the quality promised to you before you purchased it
Keep a product even if it malfunctions or has manufacturing issues
Why does brand recognition help businesses?
It makes their name and logo easily memorable for consumers.
It helps the business recognize their own logo.
It keeps the consumer from buying more of their product or service.
It helps them partner with other businesses.
Creating a budget, having clear money goals, and slowing down to think through a purchase are all practices of a __________________.
College student
Wise consumer
Foolish consumer
Free spirit
What is one way to practice power over purchase?
Spend more money
Make quicker decisions when buying
Make sure you're sticking to your budget
Pay with credit cards to earn rewards
Since marketers have sophisticated technology and plans to get your money, what can you do to make sure you don’t fall into their trap?
Make snap decisions to buy products.
Be aware of when and where you’re being marketed to.
Stay off any form of digital media entirely.
Never buy anything online.
Contentment is hindered by ________________.
Immediate gratification
Delayed gratification
Money principles
The Five Foundations
You should always do research about the company you're applying for a job at or interviewing with.
True
False
An entrepreneur is someone who ________________________.
Works an entry level job at a large business
Starts and runs their own business
Gets hired to work for their dream company
Starts and runs someone else’s business
The first step in finding your dream job is
Interviewing
Discovering your talents, passions, and values
Dreaming about it
Applying
The very best investment you can make is in
Yourself
The stock market
Real estate
A new car
What is the point where your greatest talents, passions, and values intersect?
Your perfect place
Your sweet spot
Your dream job
Your first job
___________________ skills are things you learn in school or receive special training on.
Soft
Hard
________________ is an example of a soft skill.
Computer programming
Analytics
Being a team player
Building a house
Mentors are people who can guide, encourage, and hold you accountable as you make the climb to your dream job.
True
False
Which of the following is NOT a key quality of a good mentor?
Accomplished
Understanding
Wealthy
Caring
Many high schoolers get so caught up in the idea of the college experience that they don't think critically about . . .
Their high school GPA
How their college choice will affect their f inancial future
Their dream job
What requirements they need to get into college
Part of making a plan to _____________ involves searching for scholarships, saving, and talking with your family about what kind of financial help you'll get.
Pay cash for college
Live in a dorm
Take out a student loan
Get good grades
It takes the average person ____________ to pay off their student loan debt.
20 years
10 years
5 years
2 years
Private student loans typically have a higher interest rate than federal student loans.
True
False
Getting good grades and scoring well on college entrance exams give you a better chance of _____________.
Going to an out-of-state college
Getting a scholarship
Getting an interview
Graduating early
You should figure out what you're passionate about before going to school for a specific field of work.
True
False
FAFSA is the federal application required to . . .
Receive financial aid
Get a part-time job your first semester
Do a work-study program
Get into college
Most employers care more that you're educated in your field than they care about . .
If you're good at your job
Your work ethic
Your future career plans
What college you went to
What is The Fourth Foundation?
Pay cash for college.
Pay cash for your car.
Save a $500 emergency fund.
Build wealth and give.
A bank can help you __________ your money and keep it ________.
Manage; safe
Find; growing
Deposit; budgeted
Budget; available
A savings account is for ___________.
Investing your money
Regular spending
Long-term savings goals
The Entertainment budget line item
The Federal Deposit Insurance Corporation (FDIC) and National Credit Union Administration (NCUA) keep your money in the bank insured up to _________ per account.
$250
$2,500
$25,000
$250,000
Credit Unions differ from retail banks in that they typically require membership based on specific criteria.
True
False
If you see a charge you don't recognize, you should report it to your bank immediately.
True
False
With certificates of deposit (CDs), you have to pay a penalty for ____________.
Withdrawing your money early
Depositing money into the account
Creating a savings account
Using an ATM
Liquidity is . . .
How quickly and easily you can access your money
A great way to find a financial service that's right for you
When you deposit silver or gold and they liquify it for you
How money flows from bank to bank
As the owner of your account, managing your money is __________ responsibility.
Not your
Your
Your parent's
The banks
A debit card linked with your checking account is a good option for regular spending.
True
False
Insurance helps you transfer the ____________ from your bank account to the insurance company.
Risk
Money
Insurance
Health
It's wise to have _____________ because even if you're a great driver, there are plenty of people who aren't.
Health insurance
An SUV
Liability insurance
A hefty savings account
If you're young and healthy, medical insurance is not as necessary.
True
False
In return for paying the insurance company a fee, they will . . .
Pay for certain expenses or damages
Give you a paycheck every month
Manage your money for you
Create your monthly budget
The amount of money the insurance company agrees to pay for an incident is called __________.
Co-pay
Deductible
Claim
Coverage
Medicare and Medicaid are examples of . . .
Health Savings Accounts
Government programs for public health insurance
Private health insurance companies
Emergency Medical Systems
Most insurance companies allow a _______________, during which you can pay your premium before you lose your coverage.
Grace period
Out-of-pocket maximum
Long-term disability insurance
Claim
People who rely on you financially are called your ____________.
Family
Beneficiaries
Dependents
Death benefits
Umbrella insurance is coverage for . . .
Damage to your home in a severe thunderstorm
Your wardrobe and accessories
Things that fall outside of your home and auto insurance policies
Homeowners who cannot afford insurance
Withholdings and deductions are . . .
Examples of deficit spending
Expenses that are taken out of your paycheck
Categories of a good budget
Money that the government gives back to you
The money you earn hourly for your time and effort at work is called your ____________.
Wages
Salary
Minimum wage
Income tax
What does the Form W-4 estimate?
How much tax you'll owe based on your personal situation.
How much income you should be making.
How much money you'll spend in that fiscal year.
How many tax returns you need to submit.
If you work and earn money, you will have to pay taxes.
True
False
There are two general types of taxes. Taxes on the money you __________ and taxes on the money you _______________.
Give; save
Budget; don't budget
Have; want
Earn; spend
Net income is also called your
Gross income
Fiscal year
Discretionary spending
Take-home pay
Those who properly fill out their Form W-4 shouldn't have too much or too little taxes withheld.
True
False
Getting a big tax refund is not necessarily a good thing.
True
False
Giving to a nonprofit organization can help lower your taxable income.
True
False
It's best to develop good ____________ now instead of waiting until you're on your own to figure it all out.
Money habits
Diet and exercise plans
Real estate investments
Friendships
Your rent payment should total no more than ____% of your take-home pay.
50
15
75
25
When you're ready to buy a house, the best option is a
20-year VA loan
15-year fixed-rate conventional mortgage
30-year equity loan
30-year fixed rate mortgage
You should rent until you are able to _______________.
Buy a home the right way
Become a landlord someday
Invest in stocks
Buy amenities
A house is an asset that typically will ______________ value over time.
Stay the same
Decrease in
Depreciate in
Increase in
A leasing contract . . .
Can be terminated at any time without any fees or penalties
Is a legal document that allows the renter (tenant) to use the property for a period of time
Is something a roommate owes taxes on when they move in with the current renter
Should be signed immediately, even before reading it
What type of interest rate is locked in and won't change for the life of the loan?
15-year
Fixed-rate
Equity
Adjustable rate
What is your mortgage principal?
The largest amount of money you are legally allowed to borrow
The down payment needed to get a mortgage
The amount borrowed (that must be repaid) to purchase a home
The first payment you make on your new home
Equity is the difference between what you still owe on your home and what it is worth.
True
False