WorksheetsPersonal Finance S1 A
Total questions: 50
Worksheet time: 25mins
What is The First Foundation?
Pay cash for college.
Build wealth and give.
Save a $500 emergency fund.
Open a checking account.
Personal finance is all the financial decisions a(n) ______ must make in order to earn, budget, save, spend, and give money over time.
Individual or family
Company or organization
Individual or company
Bank
A money principle to keep in mind is to live on ______ you make.
Exactly 20% below what
More than
The same as
Less than
To know your net worth, subtract your liabilities from your ______.
Other liabilities
Net income
Previous net worth
Assets
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
Savers have a tendency to be . . .
Strict with their purchases but spend money without a plan
Strict with only purchases for themselves
Strict with what they spend their money on, other than groceries
Strict with their money and not spend any of it
It is possible to pay for college with cash.
True
False
An important money principle to consider is that you should ____ and ____ your money.
(a)
What are The Five Foundations?
A personal financial action plan
A starting point for adults regarding finances
A financial literacy technique
A common conclusion for debt
Personal finance is 20% ____ and 80% ____.
(a)
Which of the following is NOT a component of a budget?
Credit score
Saving
Income
Giving
What does a budget show you?
How much you need to save
How much money you plan to come in and go out during the month
How much money you need to earn
How much money you spent last month
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
Why is tracking your expenses throughout the month important?
It allows you to delete categories you don't like.
It gives you insight into whether you're sticking to the budget you set.
It helps you pull money from your savings to spend in other categories.
It really isn't that important in the long run.
A common misconception is that budgeting will keep you from having fun, when in reality a budget . . .
Adds more stress to your life
Means there are no rules—you are free to use your money however you want
Restricts your fun completely
Gives you permission to spend
When is the right time to start creating and living by a budget?
Right now - it's never too early!
When you start researching colleges and the costs that come along with it
Once you have a job with an income
When you decide it's time to buy a car
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.
Your monthly rent payment is an example of a variable expense.
True
False
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 best way to build wealth is to start investing early. You should start investing money . . .
Once you have a fully funded emergency fund
Once you're out of college, living debt-free, and have 3–6 months of living expenses saved
When the stock market is performing really well
As soon as you have extra cash
It's not IF an emergency will happen, but ____.
How
Where
Why
When
Debt is a tool to use to make you wealthy.
True
False
The purpose of an emergency fund is to . . .
Be able to cover an unexpected expense with cash and protect you from having to pile up debt when something goes wrong.
Teach you how to invest in growth stock mutual funds.
Have some extra money in a checking account in case you need to transfer some to your spending categories.
Teach you discipline—saving is purely a good exercise in self-control.
What is the Third Foundation?
Pay cash for your car.
Pay cash for college.
Save for retirement.
Create a monthly budget.
In order to outpace inflation when investing, your investments need to have a lower rate of return than the rate of inflation.
True
False
90% of millionaires make over $100,000 a year.
True
False
The amount of interest charged on a debt but not yet collected is called . . .
Accrued interest
Interest rate
Same-as-cash
Growth rate
Something that credit card commercials don't show you is . . .
People making payments for months or years on those credit card purchases
How much your credit score will grow right away
How happy your parents will be that they don't have to lend you cash anymore
How great your life will be with payments
When you finance a new car, you will end up paying more than the sticker price.
True
False
__________ require the borrower to put up collateral for the loan.
Unsecured loans
Interest rates
Revolving credit
Secured loans
There are certain things, like renting a car or booking a hotel room, that you cannot do without having a credit card.
True
False
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.
Once you turn 18, you should regularly check your credit report . . .
For errors or signs of identity fraud
To make a plan for improving your credit score
To keep an eye on your credit score
Only if you have a credit card
A car is a depreciating asset.
True
False
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
A credit score is an indicator of how well someone pays off their debt, not how well they handle money.
True
False
Why do stores like scan and go options, apps, and one-click purchases?
It's harder for customers to pay, so they end up saving money.
It makes paying easier and faster, so customers are more likely to overspend.
Digital pay is the way of the future, and retail stores like being ahead of the times.
It's easier for the retail store clerks.
The key to contentment is gratitude.
True
False
Part of being a smart consumer is being able to . . .
Say no to an unnecessary purchase
Use a credit card for the points without going into debt
Set up digital wallets and mobile payment
Discern when to open a retail store credit card and when not to
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.
It's okay to make an online purchase if you're on unsecured Wi-Fi, as long as you log off as soon as you're done.
True
False
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
Which of the following has the lowest risk for getting your card information stolen?
Handing your card over to a server at a restaurant
Making an online purchase on an unsecured site
Using your debit card and PIN at a reputable store
Storing your card information online
Reading the owner's manual, using the product as intended, and keeping the receipt are ways to . . .
Protect and maintain your purchase
Go into debt over an item
Think through a purchase
Avoid regretting an impulse purchase
If you're a victim of card fraud . . .
Contact your bank immediately
Wait until the next week to contact your bank
Wait for your bank to contact you
Call 911 before making any other purchases
Shoe companies can use influencer marketing to build brand recognition to gain credibility and familiarity.
True
False
