WorksheetsPersonal Finance Exam
Total questions: 50
Worksheet time: 7hrs 32mins
Which of the following is a reason that people donʹt save money?
they lack discipline
they do not live on a budget
they lack focus
all of the above
When it comes to saving money, the amount you save is determined by how much you have left at the end of the month once all of your spending is done.
True
False
The five steps to financial success.
Five Money Myths
Five Foundations
At your age, a fully funded emergency fund should be:
$500
$5,000
$100
$1,100
Which of the following steps is the First Foundation?
Get out of debt
build wealth and give
save a $500 emergency fund
pay cash for your car
The first thing you should save for is your retirement fund.
true
false
Save a $500 emergency fund.
The First Foundation
The Fourth Foundation
What does it mean to have a negative savings rate?
Saving for something that is a want instead of a need
Having a fully funded emergency fund
Having no savings at all
Spending more money than you make and acquiring death
Which of these is not a key to saving money?
Focus
Making saving a habit and a priority
Your income
Discipline
Interest paid on interest previously earned.
Compound Interest
Interest
Americans typically maintain a very high savings rate.
True
False
You should save money for three basic reasons: emergency fund, purchases and wealth building.
True
False
Money set aside and left alone for a ʺrainy day.ʺ
Emergency Fund
Savings Account
Why should interest earned not be a factor with your emergency fund?
Inflation can eat up the interest earned
Interest-bearing accounts at banks earn a high rate of interest, therefore, interest is not a concern
The emergency fund is not intended to grow wealth
None of the above
Which of the following is not a reason your emergency fund should be kept in a separate savings account away from your spending money?
So that you do not get your spending and saving money confused.
So that it is clear what money is only to be used for emergencies.
So that it is not too easy to access.
So that your emergency fund savings can earn a lot of interest.
Which of the following is not a reason your emergency fund should be kept in a separate savings account away from your spending money?
So that you do not get your spending and saving money confused.
So that it is clear what money is only to be used for emergencies.
So that it is not too easy to access.
So that your emergency fund savings can earn a lot of interest.
You should hold off on investing for retirement until you have college or other post-secondary education paid for.
True
False
You should keep your emergency fund in the same account as your spending money.
True
False
When you’re older and out of school, you’ll need to grow your emergency fund into a full three to six monthsʹ worth of expenses.
True
False
When a person intentionally invests money in a place where it can earn more money.
Sinking Fund
Wealth Building
Why is having a fully funded emergency fund so important when it comes to your financial well-being?
As long as you have a good-paying job, you really donʹt need an
emergency fund.
The purpose of an emergency fund is to set money aside for unexpected financial emergencies and to provide a sense of financial security.
The purpose of an emergency fund is to have money set aside for large purchases, like vacations.
None of the above
Saving money over time for a large purchase
Savings Account
Sinking Fund
Checking Account
Interest Bearing Account
When you convert the interest rate of 3.5% into a decimal, you would get?
3.5
350
.35
.035
Personal finance is ____% behavior and ____% knowledge.
50, 50
80, 20
The reason debt has become a problem in America is because
loaning money became profitable for banks and other businesses
Americans are forced to get loans.
We are told that debt is normal. It has become acceptable in or culture to use credit to buy ___________________.
Clothes
Jewelry
Food
EVERYTHING
Who profits from interest on credit card debt?
Credit card companies
People using credit cards
Personal financial success is primarily the result of:
Managing your money behavior
Winning the lottery
Generous welfare and unemployment programs
Inheriting money from your relatives
A lot of people you think “look” wealthy are broke and in debt.
True
False
Which of the following is a consequence of spending more than you make?
Missed opportunities to save and invest
Stress
A cycle of debt
All of these
The widespread financial insecurity of Americans is primarily because:
Americans have low incomes.
Americans don't save and they spend more than they make.
Interest rates in America are low.
Most Americans save a high proportion of their income.
Which of the following is a consequence of overdrawing your checking account?
Bounced check fee from the store
Stress from money mismanagement
Overdraft fee from your bank
All of the above
Which of the following is something that a typical millionaire would do?
Lease a new car
spend less money than he or she makes
replace things that are not broken
carry debt
A written a budget, if followed, remove ____________ from your finances.
Overspending
Guilt
Management by crisis
All of the above
The zero-based budget is the best method of budgeting because
The type of budget is less complicated than other types of budgets
A zero-based budget allows less money for wants
Sticking to a zero-based budget requires less discipline
The zero-based budget ensures that every dollar you make is assigned a specific purpose
The number-one cause of divorce in North America today is stress and disagreement over money.
True
False
Budgeting is crucial to your financial success.
True
False
Writing and following a zero-based budget will help you avoid overspending and impulse purchases.
True
False
"Pay yourself first" means you should assign a portion of your income to saving an investing every month.
True
False
Occurs when money is withdrawn from a bank account and the available balance goes below zero
overdraft
reconcile
impulse purchase
envelope system
Series of envelopes that are divided into categories and are used to store cash for planned monthly expenses
envelope system
check carbon
cash flow plan
budget
An item that is bought without previous planning or consideration of the long-term effects
sale item
impulse purchase
budget
envelope system
________________________ is what you earned BEFORE deductions.
Bonus Pay
Gross Pay
Net Pay
Overtime Pay
________________________ is what you earned AFTER deductions.
Bonus Pay
Gross Pay
Net Pay
Overtime Pay
To calculate the annual gross pay for an employee who receives a monthly salary
divide the monthly salary by 12.
multiply the monthly salary by 12.
multiply the monthly salary by 6.
none of the above
