WorksheetsFinancial Literacy Mid Term
Total questions: 25
Worksheet time: 13mins
According to the lesson, what is the main purpose of an emergency fund?
To save for a large planned purchase, such as a car.
To have money to invest in the stock market.
To cover unexpected expenses such as a medical bill or job loss.
To pay your monthly subscription services.
What does the "T" stand for in the SMART objectives framework?
Trustworthy
Tax Advantage
Timely
Total
If a person's net monthly salary is $3,000 and they follow the 50/30/20 budgeting rule, how much should they budget for "Wants"?
$1,500
$900
$600
$300
What is the main difference between a "Need" and a "Want"?
A need is expensive, while a want is cheap.
A need is necessary for survival, while a want is something you desire.
A need is a long-term goal, while a want is a short-term goal.
A need is paid with a debit card, while a want is paid with a credit card.
What is the concept of "Pay yourself first"?
Spend all your money on "Wants" before paying the bills.
Treat saving as a regular bill that you pay before anything else.
Use your entire salary to pay off one large debt.
Buy yourself a gift with every paycheck.
Which form must an employee fill out to determine how much federal income tax should be withheld from their paycheck?
W-2
W-4
1099-NEC
FICA
What is the difference between gross salary and net salary?
Gross salary is your pay after taxes; net salary is before taxes.
Gross salary is your pay before deductions; net salary is what you take home.
Gross salary is for salaried workers; net salary is for hourly workers.
Gross salary is your earned income; net salary is your passive income.
What is "Opportunity Cost"?
The price of an item you want to buy.
The value of the best alternative you give up when making a decision.
The amount of money you save by using a coupon.
The total cost of making a bad financial decision.
What is the definition of "Passive Income"?
Money you earn from a full-time job.
Money you earn from an asset you own, with little regular effort.
Money you receive once as a gift.
Money you earn by actively working in a side job.
What is the recommended goal for an emergency fund, as discussed in class?
One week’s pay
$1,000
Three to six months of expenses
A full year of income
What is the main difference between a bank and a credit union in terms of ownership?
Banks are owned by members and credit unions are owned by shareholders.
Banks are owned by shareholders and credit unions are owned by members.
Both banks and credit unions are owned by the government.
Banks are owned by the FDIC and credit unions are owned by the NCUA.
What is the name of the federal agency that insures deposits in banks, protecting your money up to $250,000?
NCUA (National Credit Union Administration)
FDIC (Federal Deposit Insurance Corporation)
SEC (Securities and Exchange Commission)
FICA (Federal Insurance Contributions Act)
What is the purpose of a W-2 form?
An employer sends it to you to summarize your earnings and taxes paid during the year.
You fill it out on your first day of work to set your tax withholdings.
You receive this if you are an independent contractor.
It is the form you use to file your final tax return.
Which of the following is an example of a "Need" in the 50/30/20 budget?
Concert tickets
A savings deposit
A new video game
Rent or mortgage payment
Which of the following is the most "Specific" objective according to the SMART framework?
"I want to save more money."
"I want to be rich."
"I want to save money for a new laptop sometime this year."
"I will save $50 per week for 6 months to buy a laptop."
The FICA taxes that are deducted from your paycheck fund which two programs?
Federal and state income tax
Social Security and Medicare
Emergency funds and 401(k) plans
Passive income and portfolio income
What is the key difference between a W-2 employee and a 1099-NEC independent contractor?
A W-2 employee receives a regular paycheck, while a 1099 contractor is never paid.
A 1099 contractor has taxes withheld by their employer, but a W-2 employee does not.
A W-2 employee has taxes withheld by the employer, while a 1099 contractor must pay them on their own.
A W-2 employee is passive income, while a 1099 contractor is earned income.
In the 50/30/20 budget, which category does the "20" represent?
Wants
Needs
Savings and debt repayment
Taxes and fees
You have $20. You can either go to the movies with your friends or buy a video game you want. You decide to buy the video game. What is the opportunity cost of this decision?
The $20 you spent on the game.
The time you will spend playing the game.
The experience of going to the movies with your friends.
There is no opportunity cost because you got what you wanted.
According to the lesson, what is the main benefit of "Pay yourself first"?
It guarantees that you will get a raise at work.
It turns saving into a habit and prevents impulsive spending.
It is the fastest way to pay for your "Wants".
It means you should buy things for yourself before paying rent.
Which of the following is the best example of "Earned Income"?
Money received from a rental property you own.
Wages and tips from working at a restaurant.
Interest earned in a savings account.
Money from a birthday gift.
In the 50/30/20 budget, which category does your monthly car insurance payment fall into?
Needs
Wants
Savings
Income
Which of these is a 'Want' rather than a 'Need'?
Groceries
Rent
Car insurance
Daily coffee from a coffee shop
What is the main risk of being a 1099 independent contractor, as discussed in class?
Your employer withholds too many taxes.
You are responsible for paying your own taxes (such as FICA).
You cannot have an emergency fund.
You are not allowed to set goals.
As discussed in the lesson, what is the best way to make "Pay yourself first" happen automatically?
Automating a transfer to savings.
Keeping all your money in a checking account.
Paying for wants before needs.
Requesting a W-4 form.
