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WorksheetsPersonal Finance Final Review
Total questions: 30
Worksheet time: 15mins
What is the primary purpose of creating a personal budget?
To track daily expenses
To plan for future financial goals
To increase credit score
To reduce taxes
Which of the following is considered a low-risk investment?
Stocks
Bonds
Real estate
Cryptocurrency
What is a credit score primarily used for?
To determine tax rates
To assess loan eligibility
To calculate net worth
To set insurance premiums
What is the benefit of starting to save for retirement early?
Higher interest rates
More time for compound interest to grow
Lower taxes
Increased social security benefits
Explain how a high credit score can impact loan interest rates.
It increases the interest rates
It decreases the interest rates
It has no effect on interest rates
It only affects the loan amount
Develop a plan to improve a credit score from 600 to 750.
Pay bills on time, reduce credit card balances, and avoid new hard inquiries
Open multiple new credit accounts
Close old credit accounts
Max out credit cards
Compare the benefits of a Roth IRA versus a traditional IRA for retirement savings.
Roth IRA offers tax-free withdrawals; traditional IRA offers tax-deductible contributions
Roth IRA offers tax-deductible contributions; traditional IRA offers tax-free withdrawals
Both offer tax-free withdrawals
Both offer tax-deductible contributions
Which of the following is an example of the Attainable element of a SMART goal?
Saving for a new pair of shoes
Saving $5,000 for a used car
Saving $250 per month to meet your savings goal
Reducing credit card debt by $1,000.
Which of the following is an example of the Measurable part of a SMART goal?
Planning to reach your goal in 6 months
Planning to save $5,000 total
Saving money for an emergency fund
Reducing spending on wants
Which of the following is an example of non-monetary compensation?
Health insurance
Paid time off
Retirement benefits
All of the above
Which of the following is NOT a mandatory deduction from a paycheck?
Federal income tax
Medicare
Social Security
401(k) contribution
Gross income is
The total amount of money earned before taxes and other deductions
The amount of money earned after taxes and other deductions
The amount of money earned from investments
The amount of money spent on fixed expenses every month
A fixed expense is
A cost that varies from month to month
A cost that is optional
A cost that stays the same from month to month
A cost that comes up once a year
Comparison shopping involves
Comparing prices of similar products or services from different stores or providers
Comparing your income to your expenses
Comparing your savings to your debt
Comparing your different budgeting categories
A budgeting surplus occurs when
Income is greater than expenses
Expenses are greater than income
Income equals expenses
Income is less than expenses
All of the following describe an emergency fund EXCEPT
3-6 months income
only used in the event of an emergency
should include $1,000-$2,000 total
Can help prevent debt
Compound interest is
Interest earned on only the principal amount
Interest earned on both the principal and interest already earned
Interest earned at a fixed rate
Interest earned at a variable rate
Which of the following is a not-for-profit financial institution owned by its members?
Bank
Credit union
FDIC
Stock market
A certificate of deposit (CD) is
A type of savings account with a fixed interest rate and a fixed term
A type of checking account with a debit card
A type of loan from a bank
A savings account held by the government
Payday loans are
A type of long-term loan with low interest rates
A type of government-backed loan
A type of short-term loan with high interest rates
A type of loan used to pay for college
The stock market is
A market where shares of publicly traded companies are bought and sold
A market where bonds are bought and sold
A market where retirement investments are kept
An account that holds all of your investments
All of the following are a benefit of investing EXCEPT
The potential for higher returns
The ability to diversify
The potential to beat inflation
Investment accounts are backed by the FDIC
Which of the following actions can improve your credit score?
Closing old credit accounts
Making late payments
Paying off credit card balances in full
Applying for multiple credit cards at once
What is a credit score used for?
To determine your height
To assess your creditworthiness
To calculate your monthly expenses
To measure your intelligence
What is the impact of missing a credit card payment on your credit score?
No impact
Positive impact
Negative impact
It doubles your credit score
What is the purpose of tracking your spending?
To identify areas where you can cut back
To calculate your net worth
To determine your income tax liability
To compare your spending to your budget
Which of the following is a key feature of a high-yield savings account?
Interest rates that decrease over time
No interest rates
High interest rates compared to regular savings accounts
Low interest rates
What is the main purpose of an emergency fund?
To fund vacations
To cover unexpected expenses
To invest in the stock market
To pay off long-term debt
Sara is a server at a restaurant and most of her pay is in cash. She's used to dealing with cash and has a system where she divides her money into different envelopes each month. She has one envelope for rent, one for groceries, one for gas, etc. At the end of each month, she takes one envelope for savings and deposits it into her savings account. What money management strategy is Sara using?
Pay yourself first
The 50-30-20 Method
Envelope Budgeting
Zero-based budgeting
Which of the following is a characteristic of a high-risk investment?
Low volatility
Stable returns
Potential for significant loss
Government backing
