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WorksheetsUnit 1 Test Personal Finance
Total questions: 100
Worksheet time: 50mins
Juan saved $1,000 from his summer job cleaning pools. Which of these account types would work best for him if he doesn't need access to the money for a number of years AND wants to earn the highest interest rate?
Regular savings account
Money Market account
Checking account
Certificate of Deposit
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
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?
3 months
9 months
24 months
30 months
All of the following statements about bank accounts are true EXCEPT...
If the bank is FDIC-insured, your money, up to the FDIC limit, is safe even if the bank fails
Many banks pay interest on the money you deposit into your savings account
Historically, savings accounts earn higher returns than investments in the stock market
Money in a checking account is usually easy to access via ATM, debit card or check
Jay asks his friends for advice: "Should I start doing mobile banking now that I've got my new smartphone?" Which friend is correct in their statement on the benefits of mobile banking?
Jenna says, “It’s so convenient, because you can deposit your check using your phone’s camera and the bank’s app.”
Julee says, “One major pro of mobile banking is that they typically waive all of the normal fees like overdraft fees, ATM fees, insufficient funds fees.”
Clint says, “One inconvenience is that once you set up mobile banking on your phone, you can’t use online banking on your computer any more.”
Phil says, “A con of mobile banking is that typically banks charge you a $10-15 set-up fee in addition to a small monthly fee (~$3) for mobile banking privileges.”
All of the following are true about prepaid cards EXCEPT...
Prepaid cards typically include a lot of fees
Prepaid cards are a useful option for someone who is unbanked to make online purchases
Prepaid cards are a great way to build credit
Prepaid cards are usually accepted anywhere that debit and credit cards are accepted
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, savings, wants
Savings, needs, wants
Wants, savings, needs
Wants, needs, saving
Needs, wants, savings
Mia is opening her first checking account, and she's trying to decide whether she should sign up for overdraft protection. Which friend's advice is most accurate?
Jordan says, "With overdraft protection, you never have to worry about how much money is in your account."
Donnie says, "Yes, you'll have to pay a fee for each overdraft, but you DON'T have to pay the bank back the money you overdrew the account by."
Frank says, "Overdraft protection is handy if you have an emergency (like needing gas to get to work) and don't have the funds right now."
Alexis says, "If you don't get overdraft protection, and you TRY to withdraw more than what's in your account, you pay a fee anyway."
Which represents the BEST time to start saving for your retirement?
As soon as you have your first full-time job
Right after you pay off your student loans
Once you are debt-free, including paying off all credit cards, auto loans, and your mortgage
At age 45, so you have exactly 20 years until retirement
Experts recommend that you accumulate enough to cover 3 to 6 _______________ of expenses in your emergency fund.
Months
Weeks
Days
Years
Which of these is a reason someone might choose to open an online savings account rather than a savings account at a traditional bank?
Online savings accounts are FDIC insured to a higher limit
Online savings accounts typically pay higher interest rates on deposits
Online savings accounts are less likely to make you the victim of identity theft
Online savings accounts are created specifically for people under age 25
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
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?
Aunt Tina gets a paycheck one month, and her husband gets a paycheck the next month; they alternate pay periods
Aunt Tina and her family don't have any money saved, and their paychecks are just barely covering monthly expenses
Aunt Tina and her family have high paying jobs and don’t worry much about money
Aunt Tina only receives paper paychecks instead of direct deposit
Suppose you are trying to switch banks or open a brand new credit card. Which strategy will likely lead to the WORST long-term outcome?
Look for sign-up bonuses or introductory offers that will make the product a good deal.
Read online reviews carefully, and consider those that align most closely to what you value.
Spend some time comparison shopping before finalizing your decision.
Review the fine print closely, paying close attention to fee structures and interest rates.
You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?
Your credit card company covers the cost
It is deducted directly from your checking account
Your credit card company provides you with a cash advance to cover the cost
It is deducted directly from your savings account
Fill in the blanks: If inflation is __________ your savings account interest rate then you will be __________ purchasing power.
Higher than, losing
Lower than, gaining
Equal to, maintaining
Unrelated to, unaffected
Jocelyn gets a text alert from the bank that her account balance has dropped below $100 after a series of $20 ATM withdrawals. She has not used her ATM in over a week and wonders what she should do. What would you recommend?
Wait until her monthly statement arrives so she can check to see if those withdrawals are still there
Wait a week as it is fairly common for the bank to catch mistakes like this
Check her wallet to be sure her debit card has not been stolen. If she still has it, then she should not worry.
Contact her bank immediately as it appears that her account may have been hacked
Which of the following transactions will REDUCE your checking account balance immediately?
Writing your monthly rent check which you will mail tomorrow
Using your debit card to pay for groceries at the supermarket
Using your credit card to pay for your school books
Depositing a check at a local bank branch
Which of the following best describes the amount of money you'll have if you put $1000 into a savings account earning 1% annual compound interest for 10 years? You can ignore the impact of inflation in this question.
Exactly $1100
Slightly more than $1100
$2000
Exactly $11,000
Which of the following statements is an advantage of online banking?
Once you set up online banking, your bank will waive overdraft, ATM, and monthly fees
Using online banking allows you to earn a higher interest rate
Using online banking, you can request transfers, pay bills and automate your savings without visiting the bank branch
You can only shop online if your bank account has online banking features
When signing up for a new checking account, you answer "Yes" to receive overdraft coverage. On this day, you have $10 in your account and go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?
Your account will be closed
You will likely be charged an overdraft fee for one or more of the transactions and also will need to repay the bank for the amount overdrawn
Since you requested overdraft coverage, the bank will not allow you to overdraw your account so your debit card will be denied
The bank will provide you five days to add funds to your account to cover the overdraft and no fees will be assessed
How often do customers typically receive a bank statement for their checking account?
Daily
Weekly
Monthly
Annually
Stephen buys three items at the mall. Which payment method would reduce the amount of money in his checking account?
Pays with a prepaid card he loaded earlier in the month.
Uses his credit card.
Uses his debit card.
Pays using cash.
A person-to-person payment app could be used in each of the following scenarios EXCEPT...
Tina pays her neighbor $200 for breaking his window with a softball
Rafael writes a check to cover the entire month’s rent, and his roommates Valerie and Carlos pay Rafael for their share of the monthly rent
Ahmed's soccer coach pays the team's registration fee for a big tournament, and each player then owes him $35 for their share of the registration fee
Mia pays Cheesy Pizza Co. for a pizza she orders on their website
Direct deposit typically refers to your ______ sending your ______ electronically to your bank account.
employer, bills
employer, paycheck
parents, allowance
state government, taxes
All of the following are downsides of being unbanked EXCEPT:
Lack of access to credit
Lost time paying bills
Lack of fees associated with banks
Difficulty making cashless purchases
Jennifer is trying to save up for an emergency fund of $3000. Which saving strategy would likely be most effective in helping her meet her goal? (1 point)
At the end of the month put any leftover money from her checking account into her savings instead.
Set up a direct deposit of $75 from each paycheck to automatically get put into her savings account instead of her checking account.
Wait until she's paid off all of her credit card and student loan debt, and then start saving for an emergency fund.
Every month, after she's paid for rent, student loan and credit card debt, utilities, and groceries, put $50 or
Which of these costs would be the MOST difficult to adjust if you were looking to reduce your expenses?
Loan payment on a new car
Dining out at local restaurants
Postponing a purchase for a big-screen TV
Expenses for new clothes
You earn a salary of $40,000 per year and decide to save 20% of your gross pay. You set a goal of creating a $16,000 emergency fund. How long will it take for you to achieve your goal?
2 years
3 years
1 year
6 months
If you are trying to substantially reduce the amount you spend on food, you should try...
Cooking your own food at home for as many meals as possible
Dining at restaurants more often so you don't waste water doing dishes
Eating more snacks on the go and way fewer meals at home
Drinking more coffee and soda so you are not as hungry for food
Leila just graduated from college and is comparing a few different cities to move to. Which of these factors is the LEAST important thing for her to consider right now?
Average cost of Uber, Lyft, or taxi fare
Food and grocery store options in the area
Employment opportunities
Average rent for an apartment
Greg is trying to decide whether he needs a car when he moves to the city. Which of the following would be a reason for Greg to get a car rather than use public transportation?
Using public transportation, Greg’s commute to work one-way is two hours
Greg’s company covers half the cost of his monthly public transportation pass
The cost of public transportation is less than Greg’s monthly car payment
There are several public transportation routes between Greg's apartment and work
Isaiah has a summer internship at a technology company and is paid $3,000. After Federal and state taxes, Social Security, and Medicare are deducted, his take-home pay is $2,500. Which of the statements below is correct?
His gross pay is $3,000 and net pay is $2,500
His gross and net pay are $2,500
His gross and net pay are $3,000
His gross pay is $2,500 and net pay is $3,000
You are putting together your first post-graduation budget. Your net pay is $2,500 per month and you estimate that your monthly expenses will be $2,625. Which of the following is TRUE?
You need to either cut back on your spending or find an additional source of income to balance your budget
You have room in your budget to make philanthropic donations to your favorite charity
You can invest a portion of your monthly income into a retirement fund, as your expenses are well within your budget
You have an extra $125 each month that you can spend on a fun or leisure activity
You are interested in renting an apartment after graduating college. You meet with the landlord and complete the application. All of the following may need to be provided when you sign your lease EXCEPT
A bank account
A security deposit
Proof of employment
First and last month's rent
of the following are good budgeting strategies if you want to save money at the grocery store EXCEPT:
Focusing only on the price when comparing similar products
Focusing on unit price when comparing similar products
Preparing a grocery list before you go to the store and avoiding buying items that aren’t on the list
Building a weekly meal plan around items you already own or items that are on sale that week, rather than just choosing foods you'd like to eat
Which description is most accurate for a Zero-Based Budget?
You put every dollar of your net pay into a budget category each month
You spend your checking account balance down to $0 every month
You spend your saving account balance down to $0 every month
You pay every one of your debts down to $0 every month
For two months in a row, Aaron realizes he has gone over budget by roughly $175. Which of these options makes the most sense for him to fix his problem?
Cancel one of his streaming video subscriptions and go out to dinner three fewer times each month with friends
Start paying just the minimum monthly payment on his student loan and credit card debt, instead of the extra he's been contributing
Contribute $100 less to savings each month and $75 less to his retirement fund
Sell his current car and get a less expensive vehicle
You're considering moving into a 3 bedroom apartment with 2 roommates, rather than living on your own post-college. Which of your expenses would likely decrease by having roommates?
Rent
Bedroom furniture
Cell phone bill
Groceries and eating out
Danaisha does all her grocery shopping at organic markets and has a monthly grocery bill of $325. Charles says that Danaisha is wasting her money on wants instead of focusing on needs. He buys in bulk, uses coupons, and shops at Save-More for a monthly bill of $195. Who's budgeting correctly for food?
Both, because needs vs wants are determined on an individual basis
Danaisha, because she is focusing on her health, which will have a guaranteed payoff in the long run
Neither, because they should meet in the middle somewhere. Charles should focus more on health, and Danaisha should cut her spending.
Charles, because he's taking efforts to save money by focusing on his needs only
When living in a rural area, you are most likely to…
Depend mostly on personal vehicles, such as cars or motorcycles, for transportation
Frequently use ride-sharing services for everyday travel
Often walk or bike to most destinations due to close proximity of amenities
Rely heavily on public transportation like buses and trains for daily commuting
You overhear your cousin talking about the importance of creating and sticking to a budget. All of the following are good reasons to create and stick to a budget EXCEPT:
Having a budget is a requirement for obtaining a mortgage
A budget can help you identify any bad spending habits
Using a budget can allow you to work towards your financial goals
Having a budget can help you create an emergency fund
Which one of these expenses most likely represents a VARIABLE cost in someone's budget?
Electricity bill
Rent
Car insurance premium
Student loan payment
What action corresponds to the advice "Pay yourself first?"
Set aside a fraction of your paycheck into a savings account before you start spending
Wait until the end of the month to determine how much you have leftover to save
Become self-employed so you're paying yourself instead of being paid by an employer
Spend your regular paycheck on needs and wants but funnel any extra money into saving
Now that Sanjana is done with college, she is trying to decide whether or not she should buy a new laptop for herself. She has made a preliminary list of questions she can ask herself to determine if the new laptop is a need or a want. Which of the following questions would you ELIMINATE from this list?
What model laptop is trendy right now with people my age?
How am I going to pay for this laptop? If I have to charge it or take out a loan, can I afford the monthly payments?
Is this the right time to buy this laptop or will it likely be on sale later?
Can I afford this laptop right now?
Which of the following is TRUE about a lease agreement?
A lease is an agreement that includes details about rent, apartment policies, vacating, etc.
A lease often has information about your prior housing experience; it's a record that the apartment owner can use to see if you are a good candidate
You never have to pay any fees when you sign a lease. If you do, that means it is a scam.
A lease is an agreement between you and your roommates that you submit to the apartment owner.
Which of the following accurately describes the envelope budgeting strategy?
Putting cash for different spending categories into separate envelopes and only spending what's in each envelope
Keeping a written record of all of the money you receive and spend in a notebook to see where your money goes
Regularly buying investments like stocks or bonds with a certain amount of money each month
Saving a small part of your income every week to buy something big at the end of the year
One way the grocery store tricks you into spending more money than you budgeted for is...
Putting high priced items at eye level and lower cost items above or below eye level
Being open early in the morning and late at night
Accepting digital and print coupons
Paying their cashiers and baggers more
Janine is considering what auto costs she is going to have after buying a new car. She has budgeted enough money for the monthly auto loan payment, gas, and auto insurance. Has Janine factored in all of the costs associated with car ownership?
No, she needs to factor in other costs such as maintenance, emergency repairs, etc.
Yes, these are the three costs she should expect to pay once she is a car owner
No, she does not need to include the cost of auto insurance as it is included in her auto loan payment.
No, she does not need to include the cost of gas as it is covered under her auto insurance policy
Which statement accurately describes how the 50/20/30 Rule would break down your take-home pay?
50% needs, 20% on saving, and 30% on wants
50% on saving, 20% on wants, and 30% on needs
50% on wants, 20% on saving, and 30% on needs
50% on saving, 20% on needs, and 30% on wants
A good rule of thumb when budgeting for a home is to expect to make a _______ down payment.
20%
35%
10%
5%
Jaime is creating a budget for the first time and doesn’t know which to use - NET PAY or GROSS PAY. What do you tell him?
“Use net pay, because it’s the total amount you’ve earned minus taxes and other deductions.”
“Use gross pay, because that is the amount that is reported to the government for taxes.”
“Use net pay, because it’s the total amount you’ve earned for the month.”
“Use gross pay, because it’s the total amount you’ve earned minus any recurring bills you owe for the month.”
When creating a budget, which list below portrays expense categories in the most responsible order?
All of your needs, savings, high priority wants, low priority wants
All of your needs, high priority wants, low priority wants, savings
All of your needs, high priority wants, savings, low priority wants
Savings, high priority wants, low priority wants, all of your needs
Why is it important to create a budget?
A budget will help you save money and prioritize your spending
A budget is a necessary to qualify for loans and credit cards
A budget makes filing your taxes faster and simpler
A budget will guarantee you have enough money saved for college so you won't need loans
Which of the following situations is an example of net pay?
A. Timothy multiplies his hourly wage by his total hours worked then subtracts taxes and deductions
A. Helene multiplies her hourly wage by her total hours worked then subtracts taxes, deductions, and budgeted needs
A. Chrissy multiplies their hourly wage by their total hours worked and subtracts taxes
A. Brian multiplies his hourly wage by his total hours worked
What is the purpose of an apartment lease?
A. It outlines the amount of rent you'll pay, when it is due, and key obligations and rights of living in the property
A. It makes it illegal for your landlord to evict you from the property
A. It provides insurance if any guests to your apartment are injured on the property
A. It provides the budget you'll use for all of your household expenses
All of the following are types of utilities that you may have to budget for EXCEPT
Rent
Gas
Water/Sewer
Electric
Young adults are more often choosing to rent instead of buying a home because…
They're graduating with a lot of student debt they must pay off, so it takes longer to save a down payment
Monthly rent payments are always lower than monthly mortgage payments
Renting is a better long-term investment strategy
Landlords give young people better rates on apartments than older people can qualify for
How might someone’s location impact the different transportation options available to them?
Urban areas offer more public transport and car sharing; rural areas rely more on having a personal vehicle
All transportation options are universally accessible
Location only affects how much someone pays for transportation, not the options they have available to them
Location does not impact transportation options
Joanne is buying a new car and her monthly payment is $320. She allocates $350/month towards auto-related costs. What mistake is Joanne making when creating her auto budget?
She is not accounting for the cost of fuel, insurance, maintenance, and other potential expenses beyond her car payment
She is overestimating her budget, as $350 is more than enough to cover all car-related expenses
Joanne should not allocate any budget for auto-related costs other than the monthly payment
The mistake is in buying a new car; she should always opt for a used car
Andrew has a car and is moving to the city for his new job. Which of the following actions would be the MOST effective way for him to decrease his transportation costs?
A. Switching to public transportation or biking for his daily commute
A. Buying a more expensive, luxury car for better comfort
A. Upgrading to premium fuel for his current car
A. Washing his car more frequently to maintain its appearance
All of the following are ways you can save money at the grocery store EXCEPT…
A. Pay someone to do your grocery shopping so you don’t make unnecessary purchases
A. Buying whole produce instead of pre-cut
A. Avoid impulse purchases made at the register like magazines or candy
A. Make a list and only purchase items on it
Which of the following scenarios shows someone losing purchasing power due to inflation?
Aafia gets a 2.5% raise and inflation increase prices by 3%
Joanna gets a 4.5% raise and inflation increases prices by 4.5%
Artie gets a 3% raise and inflation increases prices by 2%
Gyasi gets a 5% raise and inflation increases prices by 3.5%
Jaime is creating a budget for the first time and doesn’t know which to use - NET PAY or GROSS PAY. What do you tell him?
“Use net pay, because it’s the total amount you’ve earned minus taxes and other deductions.”
“Use gross pay, because it’s the total amount you’ve earned minus any recurring bills you owe for the month.”
“Use net pay, because it’s the total amount you’ve earned for the month.”
“Use gross pay, because that is the amount that is reported to the government for taxes.”
Which of the following statements best reflects a ‘zero balanced budget’?
where every anticipated earning is assigned a role to be spent, saved, or invested
where a percentage is allocated to needs, wants, and savings
where every anticipated form of income is assigned to savings, then spent, saved, or invested
where all money earned is set aside for unexpected events that require large sums of money
This is when you allocated a percentage of money to needs, wants, and savings
50-30-20 rule
envelope budgeting
emergency fund
income based budgeting rule
method where money for monthly spending is taken out in cash and placed in labeled locations according to budget categories
envelope budgeting
zero based envelope budget
zero based budget
rainy day fund
Which are one advantages of having an account at a local community bank versus a national bank?
Community banks typically give back and support the local community
Community banks typically have HIGHER fees and charges when compared to a national bank
Community banks are typically larger and more well-known than national banks
Which is one advantages of having an account at a local community bank versus a national bank?
Community banks typically have LOWER fees and charges when compared to a national bank
Community banks are typically larger and more well-known than national banks
Community banks typically have HIGHER fees and charges when compared to a national bank
When you deposit your money at a community or online bank, your money is insured by the FDIC up to $250,000.
True
False
Sometimes
All of the following are reasons to open a checking account EXCEPT…
Earn interest on your deposits
The ability to make purchases with a debit card
Access to cash at an ATM
Making it easier to pay bills
Daisy reads her bank statement and finds an error. She should…
Call the bank. The bank will investigate the transaction to see if it was an error.
Assume that it’s a transaction that she made and forgot about.
Call the FDIC. She is insured up to $250,000.
Do nothing. The bank will correct the error at the end of the month.
Which of the following is typically a feature of a savings account but not a checking account?
Your money earns interest
Ease of making payments using a debit card
FDIC insured up to $250,000
Ability to withdraw money from an ATM
Tyreke has $5,000 to put into an account that earns compound interest. Which of the following is the BEST advice you can offer so that he can maximize interest?
Deposit your money as early as possible in an account with the highest interest rate possible
It’s ok to open an account with a low interest rates as long as you deposit your money early
Wait for interest rates to rise above 5%, otherwise compounding doesn’t have any effect
Compound interest will not have any effect at such a low dollar amount. Find different opportunities to earn interest on your savings.
Which of the following is TRUE when comparing savings accounts and certificates of deposit?
Savings accounts allow you to access your money at all times while certificates of deposit require your money to be left alone for a set period of time
Both savings accounts and certificates of deposit allow you to deposit money at any time
Savings accounts typically have a higher interest rate than certificates of deposit
Savings accounts are FDIC insured while certificates of deposit are not
Which of the following statements is TRUE about overdraft fees?
You are charged when more money is withdrawn from your account than it has available
They are a one-time payment made by the bank to the account holder
They are charged if you fail to meet the minimum balance requirement
You are legally required to have overdraft protection for your account
All of the following are ways that you could potentially avoid a monthly maintenance fee on your account EXCEPT…
Only banking online instead of using physical bank locations
Meeting a monthly minimum balance requirement
Having both a checking and savings account with the same bank
Finding a bank that offers accounts with no monthly maintenance fee
All of the following are ways to avoid ATM fees EXCEPT…
Withdrawing money from your savings account instead of your checking account
Using your debit card instead of withdrawing cash to make a purchase
Finding a bank that reimburses you for ATM fees
Avoiding out of network ATMs
Which of the following is a disadvantage of using a payroll card?
Many payroll cards charge fees
It is challenging to use a payroll card for purchases
You cannot withdraw your money for cash
You cannot use your payroll card as a debit card
All of the following are reasons that a person might be unbanked EXCEPT…
Not having a credit card account from a traditional bank
Not having a bank within close distance to your residence
Not having enough available money to maintain an account
Not trusting the banking system
Danielle is unbanked and is considering using a prepaid card. Which of the following would be BAD information to give her about prepaid cards?
Prepaid cards are a good way to build credit because they work like credit cards
Prepaid cards can have a lot of fees associated with them including transaction and loading fees
Prepaid cards are generally accepted anywhere that debit and credit cards are accepted
Prepaid cards are a viable way for the unbanked to complete online transactions
Which strategy will help you save the most money?
As soon as you receive your paycheck, put a fixed amount or percentage of your money directly into your savings.
Wait to deposit into your savings account only when you have a large lump sum of money.
On the last day of each month, deposit a fixed $10 to your savings account.
Wait until the end of the month and add any money that you have not spent to your savings account.
What is the benefit of automating your savings account contributions?
Your money will be transferred automatically and guarantees you will be contributing to your savings.
Your employer will contribute additional money to your savings account if you enroll in this service.
The fees are relatively small to enroll in this service.
You can change the amount you deposit each month.
What does it mean to "pay yourself first"?
Deposit money into your savings account before spending on anything else.
Purchase an item you want before something you need.
Pay all of your mandatory expenses before paying for optional expenses.
Obtain an additional job to supplement your income.
What is a major benefit of the Pay Yourself First strategy?
It encourages you to prioritize saving money
It helps you budget all of your income for the month
It is a good way to build credit
It generates additional income to cover essential expenses
When developing a savings plan, which is TRUE about saving and inflation?
In order to avoid losing purchasing power over time, the rate of return for savings accounts should be at least as high as the rate of inflation
In order to avoid losing purchasing power over time, the rate of return for savings accounts should be lower than the rate of inflation
To maximize saving, the rate of return for savings accounts should be exactly equal to the rate of inflation
There is no relationship between saving and inflation
What does it mean to live paycheck to paycheck?
Struggling to cover your financial needs with each paycheck
Saving a portion of your paycheck for emergencies
Having multiple sources of income to cover expenses
Enjoying a comfortable lifestyle without worrying about money
How can credit cards make it more challenging to save?
Credit cards make it easier to spend money
Retailers mark up purchases if you use a credit card
You will be charged a fee for every credit card transaction
Many banks will not let you open a savings account when you have a credit card
When sending a payment using a P2P payment account, which information is typically required for the transaction?
Email address or phone number
Home address
Passport number
Social security number
What is the primary purpose of a digital wallet?
Digital wallets focus on contactless transactions with businesses
Digital wallets facilitate sharing money within a group
Digital wallets store cash in digital form
Digital wallets provide expense tracking for making budgets
What precaution can individuals take to avoid falling victim to scams on P2P payment apps?
Verify the authenticity of communication by contacting the bank directly
Ignore all text messages from unknown numbers
Share their account details with friends
Avoid using P2P apps altogether
Which of the following is an example of online bill pay?
Having your bank send your rent to the landlord each month
Using a person-to-person app to repay your friend for dinner
Using a mobile payment service to purchase your groceries at a store
Having your check direct deposited into your bank account
Which of the following statements is an advantage of online banking?
Using online banking, you can request transfers, pay bills, and automate your savings without visiting the bank branch
If you set up online banking, your bank will also file your taxes for you automatically
Online banking is the only way you can make online purchases
Once you set up online banking, your bank will waive overdraft, ATM, and monthly fees
All of the following are ways that you can keep your online bank account safe EXCEPT…
Banking with small banks and credit unions because they are less frequently the target of fraud
Changing your password regularly using reasonably complex passwords
Turning on text alerts to monitor your account for large or potentially fraudulent transactions
Only using private wifi to access your account
the difference between a fixed expense and a variable expense.
Fixed Expense; constant
Variable Expense;; changes
Fixed Expense; less predictable
Variable Expense; more predictable
Buying a home achieves which two financial goals at the same time
Providing a place to live, investing for the future
Providing a place to live, paying for your college expenses
Providing a place to live, bringing you great happiness
Providing a place to live, paying off your consumer debt
Andrew has a car and is moving to the city for his new job. Which of the following actions would be the MOST effective way for him to decrease his transportation costs?
Switching to public transportation or biking for his daily commute
Buying a more expensive, luxury car for better comfort
Upgrading to premium fuel for his current car
Washing his car more frequently to maintain its appearance
What is a reasonable thing you can do to avoid buying items that catch your eye when going through the aisles?
Make a list beforehand and commit to only purchasing the items on the list
Purchase all of your groceries online and avoid going into stores
Ask an employee to escort you to each item that you need every time you go to the grocery store
Avoid walking through the aisles by taking a friend along and having them do your shopping for you
Which is not a reason why budgeting is important
Budgeting does help spot bad patterns in your spending so you can make adjustments
Budgeting helps you to understand how much money you have and where you spend it
Budgeting helps you get or stay out of debt
Budgeting helps you save for the future
