WorksheetsCh 1 Test - Intro to Personal Finance
Total questions: 35
Worksheet time: 1hrs 10mins
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
Earning, budgeting, saving, spending, and giving affect your money
Consumer decisions will affect your accounts
Banks got into the credit business before 1920 because charging exceptionally high interest rates was legal.
True
False
You should always make sure you have a…
Budget
Credit card
Direct deposit
Credit line
To gain an understanding of your personal finances, you should know . . .
Your financial goals
How much income you have
Where you stand financially, how much income you have, what goals you want to set, and how you’ll reach those goals
Your investment portfolio and your financial advisors’ contact information
What is The First Foundation?
Open a checking account.
Build wealth and give.
Pay cash for college.
Save a $500 emergency fund.
6. Being a spender has many more positives than being a saver.
False
True
Personal finance is all the financial decisions a(n) _______ must make in order to earn, budget, save, spend, and give money over time.
Bank
Individual or company
Individual or family
Company or organization
Avoiding debt can lead to financial freedom and hope.
True
False
After World War I, the demand for products increased, and people began getting credit without loan sharks. Because of this, credit...
Was devalued in the marketplace
Increased so rapidly, loan sharks became obsolete
Was offered at even higher interest rates by loan sharks
Started to become more socially acceptable
A money principle to keep in mind is to live on ________ you make.
Less than
The same as
More than
Exactly 20% below what
To know your net worth, subtract your liabilities from your _______.
Previous net worth
Other liabilities
Net income
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 skills to read financial documents for personal finance classes, goals, and statements
The curriculum provided to college students about finances for their degrees
Savers have a tendency to be . . .
Strict with their money and not spend any of it
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
What is the best way to avoid running out of money too quickly?
You can invest in college.
You can make it a habit to plan and set goals for your money.
You can avoid making any purchases for the next 30 days.
You can put your money in a safe place, like a bank, and not spend it.
It is possible to pay for college with cash.
False
True
Franklin D. Roosevelt passed the New Deal because of the Great Depression in the 1930s. What was the purpose of this program?
To promote economic recovery and social reform
To create a borrowing system within the country
To divide the national budget in half and distribute it
To alleviate financial concerns with the United Nations
An important money principle to consider is that you should ______ and ______ your money.
Invest; endow
Save; invest
Invest; lay out
Spend; invest
If your assets total more than your liabilities, you will have a(n) ______ net worth.
Positive
Negative
Unknown
Equal
What are The Five Foundations?
A personal financial action plan
A starting point for adults regarding finances
A common conclusion for debt
A financial literacy technique
Your money personality impacts . . .
What you plan for as an adult
Your financial level
Your understanding of bank transactions
How you handle money
What does living paycheck to paycheck mean?
Living paycheck to paycheck is an expression used to explain the situation in which a person cannot plan past the next paycheck due to financial and budgeting difficulties caused by outside circumstances.
Living paycheck to paycheck occurs when a person's income is devoted to expenses which, in turn, means that little to no money is put in savings.
When a person chooses to not deposit their paycheck, they are living paycheck to paycheck.
Living paycheck to paycheck is an expression used to describe a situation when someone eagerly awaits their next paycheck to plan for the month's expenses.
You are either only a natural saver or a natural spender. You cannot have a balance of both.
False
True
In 1972, what association made borrowing money to attend college much easier than it had been?
The Federal Student Approval Association (FSAA)
The Student Loan Marketing Association (SLMA)
The Student Federal Funding Association (SFFA)
The Student Loan Approval Association (SLAA)
Without any debt, you can be outrageously ________.
Generous
Selfish
Cautious
Thrifty
When you set financial goals, they should be . . .
Timely, bank-based, specific, and yours
Specific, measurable, time-sensitive, yours, and written
Specific and measurable
Only time-sensitive
As a single adult, you should . . .
Beware of planned and budgeted buying
Seek a financial counselor or advisor by age 25
Have an accountability partner you trust somewhat
Keep managing your money as a priority
Personal finance is 20% ________ and 80% ________.
Reactions; behaviors
Behavior; head knowledge
Cause; effect
Head knowledge; behavior
Using credit has not always been a socially accepted practice, but it has become . . .
Normal in American culture
A practice used by the wealthy
Necessary for life in America
Less acceptable
A ______ financial goal takes up to two years to reach.
Medium-term
Five-level
Short-term
Long-term
What is The Fifth Foundation?
Find a financial professional.
Pay cash for your car.
Get out and stay out of debt.
Build wealth and give.
Personal finance is dependent upon your behavior because:
It is influenced by external factors only.
It does not require any personal involvement.
It is solely determined by your income level.
Your spending and saving habits directly impact your financial health.
How are assets and liabilities connected to net worth?
Net worth is the sum of assets and liabilities.
Assets and liabilities are not related to net worth.
Assets plus liabilities equal net worth.
Assets minus liabilities equal net worth.
What is financial literacy?
Knowledge of global financial markets
Understanding and effectively using various financial skills
Expertise in investment banking
The ability to read financial statements
Which of the following is one of The Five Foundations that can help you manage your money right now?
Save a $500 emergency fund
Pay off all debt
Buy a new car
Invest in cryptocurrency
Which of the following is the correct order of The Five Foundations?
build wealth and give, create a $500 emergency fund, pay cash for your car, get out of debt / stay out of debt, pay cash for college
create a $500 emergency fund, get out of debt / stay out of debt, pay cash for your car, pay cash for college, build wealth and give
build wealth and give, pay cash for college, pay cash for your car, get out of debt / stay out of debt, create a $500 emergency fund
get out of debt / stay out of debt, pay cash for college, build wealth and give, create a $500 emergency fund, pay cash for your car
