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WorksheetsUnit 1: Personal Finance Fundamentals
Total questions: 64
Worksheet time: 32mins
Which of these is NOT a function of money?
a store of value
a way to make trade difficult
a unit of account
a medium of exchange
What is bartering?
an arrangement to pay over time
the exchange of goods between two people
borrowing to pay off a debt
bargaining for the best price
Which of these is a want and not a need?
a baseball cap
food
health care
shelter
Which of these is a form of earning?
a lottery win
wages
an inheritance
theft
Of the following life goals, which is typically the most expensive?
paying for college tuition
raising a child
owning your own home
saving for retirement
Which would be considered an unanticipated life expense?
furthering education
childcare
managing a long-term illness
leasing a vehicle
Which might be found at the U.S. Department of Labor website?
information about car insurance
facts about mortgages
federal guidelines for healthcare
career resources
Which of these is a true statement?
Planning for long-term goals is not as important as determining daily expenses.
Personal ambitions and goals need to align with the financial prospects of a chosen career.
Financial security is always more important than career interest and satisfaction.
Daily living expenses must be met before you can plan long-term goals.
Which of the following is true of college?
Attending college is a guarantee of personal happiness.
College may help you fulfill your personal and career goals.
College is the only way to get ahead in life.
College costs money, but community college and trade schools are always free.
What is one difference between a Bachelor's degree and an Associate's degree?
a Bachelor's degree is not useful for the sciences
an Associate's degree is usually free
a Bachelor's degree requires more time and credits
an Associate's degree is only offered for business subjects
Which of the following best describes a certification?
a representation of a two-year degree program
an award that an organization gives for attending its classes
a diploma that is awarded by an unaccredited institution
a credential demonstrating specific skills or knowledge
Which is a significant benefit of an apprenticeship?
It reduces a student's costs by allowing them to take online classes while they work.
It enables an individual to work a full-time job and receive specialized training.
It helps an employer reduce the cost of overtime.
It allows a worker to keep working while attending night school.
How can people evaluate whether their education, career, and life goals align?
examine where they want to live in the future
analyze the costs of schooling, the career potential, and return on investment
consider whether they want to go to college
investigate whether there is growth in the jobs they want
Which of the following is NOT information needed to complete the Free Application for Federal Student Aid (FAFSA) form?
Tax records from the student’s parents or legal guardians
The student’s mailing address
The student’s marital status
Where the student’s parents or legal guardians work
Nova wants to work in graphic design but isn't sure how much education she needs. She loves to be creative and can learn software programs quickly. Which post-high school option would be BEST for Nova, if she wants to earn the most amount of money throughout her career?
Pursue a bachelor's degree at a college or university
Attend a college or university to earn an associate degree.
Start working as soon as possible, so she starts earning money immediately.
Take online software classes and get certifications in a few different design programs.
Which of the following is the biggest tax you pay?
FICA Social Security tax
FICA Medicare tax
state income tax
federal income tax
Which of the following benefits has the potential to earn you the most money?
401k or other retirement program
child care benefits
two weeks paid vacation time
free lunch program
Which employee benefits are not required by law?
wellness
minimum wage
unemployment
family leave
What is the main difference between a bank and a credit union?
Banks exist to make a profit; credit unions re-invest profit to benefit members.
Unlike banks, credit unions do not have online banking.
Banks offer higher-yield interest rates than credit unions.
More services are offered by banks than by credit unions.
Sasha needs a bank that is open 24/7 and accessible overseas. Which bank should she choose?
savings and loan
internet bank
international financial institution
local credit union
Why are higher-interest checking and savings accounts preferable?
They give you more checks
They take longer to earn you additional money
They hold and transfer money and offer different ways to pay
They speed up your rate of return
Which of the following is NOT a method of payment using a checking account?
personal check
EFT
debit card
credit card
Adding a fixed amount to your savings each month to have in case of emergency or to save for the future is called
a slush fund
emergency money
additional savings
paying yourself first
If $500.00 is placed in a savings account paying 10 percent per year compounded annually, what will the account balance be at the end of the year?
$550.00
$552.36
$505.00
$600.00
The highest-value alternative given up when a choice is made due to scarcity is
opportunity cost
scarcity cost
discretionary cost
second best
The Rule of 72 is a method to determine
the initial amount you should invest
the annual interest rate
how many months it will take to save the target amount
the time it will take an amount to double in value
How is a person's net worth determined?
It is their total assets combined with the amount in their bank accounts, minus debts
It is their monetary net worth divided by their debts
It is their net income multiplied by their annual percentage rate
It is a projection of their lifetime earnings
What is the purpose of a transaction register?
to record checks that have been written
to keep a running balance of your bank account
to keep track of all your deposits, payments, and purchases
all of the above
Which bank should Sasha choose if she needs a bank that is open 24/7 and accessible overseas?
savings and loan
local credit union
internet bank
international financial institution
Which action best shows a careful consumer behavior when shopping?
purchasing a random item on limited sale
creating a detailed shopping list before buying
avoiding price comparisons altogether
always choosing the most expensive brand
Which step should come first when building a personal budget?
finding a budgeting phone application
examining monthly cash inflows and outflows
listing every possible luxury purchase
setting a long-term retirement goal first
Which situation shows negative cash flow for the month?
income 1,050;expenses 1,150
income 1,500;expenses 1,200
income 1,200;expenses 900
income 1,100;expenses 950
To balance a budget sustainably, which statement must be true?
income equals or exceeds total expenses
transportation costs are exactly twelve percent
variable expenses exceed fixed expenses
savings only happen after impulse buys
Which goal is most appropriate as a short-term savings target?
building retirement over thirty years
saving for next year’s college tuition
buying a house within two months
paying to attend a regional tournament
What is credit in personal finance?
interest charges on a credit card purchase
the cost of borrowing over the loan’s life
money a borrower repays including interest
a report lenders use to make decisions
Which payment method typically does not include interest on purchases?
personal installment loans
credit cards for online orders
title loans for used vehicles
debit cards linked to checking
Spending on trendy, high-status items can project an image but what is a likely downside?
reduces the need for a budget
can lead to unwanted personal debt
always increases future income
guarantees better product quality
A root cause of overspending by many students is that the student
does not keep track of her spending
always buys only essentials
never shops online for anything
has a large emergency savings
Which is NOT a typical effect of long-term overspending?
expenses exceed income consistently
use of debt and fees often increases
credit counseling may become needed
impulse buying no longer ever occurs
Net Monthly Income (NMI) is used primarily to
determine your monthly spending budget
calculate only your variable expenses
estimate your discretionary allowance
find your fixed expense totals
Discretionary income is best defined as the money
remaining after bills and obligations
spent on overconsumption habits
allocated to variable expenses only
reserved strictly for luxury items
Which topic is NOT typically covered by consumer credit laws?
limits on a card issuer’s interest rate
how credit data is collected and used
rules for when collectors may contact
required information given at loan signing
Which practice helps prevent impulse buying and overspending?
using cash envelopes for categories
saving card details in every app
shopping hungry during big sales
avoiding all price comparisons
When comparing credit and debit at checkout, which statement is most accurate?
debit builds a long credit history
debit usually adds interest charges
credit may add debt if not repaid
credit draws from your checking now
Which action best protects your private information online?
Use strong passwords and change them regularly
Only share details with close friends
Rotate browsers every few days
Delete old emails twice a year
How can a credit report help you spot suspicious financial activity?
It lists names of identity thieves
It shows fraudulent credit accounts opened in your name
It explains how you shared private data
It reverses all unauthorized charges
What is a key risk of sharing a joint bank account?
One holder earns more interest than the other
One holder can transfer funds without the other knowing
Personal data is posted publicly online
Banks add higher borrowing fees
Ronaldo must buy olive oil. What should he do to make the smartest purchase decision?
Switch to butter if it seems cheaper
Compare price and unit price across several brands
Buy the smallest bottle available
Choose the bottle with the biggest markdown
Ursula compares a 64‑ounce juice for 4witha32‑ouncejuicefor 3.20. How much does she save per ounce by buying the 64‑ounce carton?
$0.32 per ounce
No savings per ounce
$0.06 per ounce
$0.80 per ounce
Nico owns a restaurant and needs many lightbulbs. What can he do to maximize buying power?
Buy in bulk to lower unit cost
Choose the most expensive brand
Wait for prices to rise first
Purchase single bulbs over time
Which of the following is an unhealthy behavior related to purchasing a good or service?
buying something based on the recommendation or the review of another person
buying something due to peer pressure or to keep up appearances
buying something to meet a want rather than a need
buying something that does not work well or that breaks quickly
Eric and Melissa are married and looking to buy their first home. Eric wants to live in the suburbs for a yard where children can play. Melissa wants to live in the city for shorter commutes. How might they handle their differences in a healthy way?
Do what Melissa wants since shorter commutes give more time with kids
Compromise by buying a home in a distant rural area so neither gets a way
Compromise by buying a home in the city close to a large public park
Do what Eric wants since the needs of children trump the wants of adults
What is one way to help ensure that the financial decisions you make are informed ones?
Save enough money to be able to afford any option available
Buy goods and services based on what you want rather than need
Focus on how products and services are portrayed in advertisements
Gather as much information as possible through research
Arianna wanted a $500 prom dress but didn’t have the money. She used a credit card and planned to pay it off over time. Which warning from a friend is most accurate?
If you use a credit card to buy a prom dress your credit rating will drop
Once you use a credit card to buy a prom dress you won’t stop buying things
If you pay off the debt over time you’ll spend far more than $500 due to interest
You shouldn’t buy clothing on credit because companies prefer cash
How much should you pay on your credit card?
Pay only the minimum payment each month
You are legally required to pay the full balance before grace period ends
Pay interest and fees plus ten percent of the principal
Pay as much as you can, aiming to exceed the minimum payment
Which type of credit card should generally be avoided due to higher risk and cost?
a subprime card
a low‑interest card
a rewards card
a regular or “plain vanilla” card
Money given with the understanding that it will be paid back, typically with interest, is a
debt
loan
windfall
gift
Which statement is NOT true about loans?
sometimes you’ll pay in installments
you are required to pay the money back as agreed
You can get into legal trouble if you fail to pay
Some lenders allow you to default on a loan without penalty
Which of the following is an example of desirable debt?
Taking out a loan to pay for tuition at a local technical college
Borrowing $500 from parents to take a cruise
Taking out a payday loan to pay overdue bills
Using a credit card to buy a brand name purse
Net worth can be increased by
carrying a balance on multiple credit cards
increasing liabilities and reducing assets
reducing liabilities and increasing assets
taking on more high‑interest consumer debt
Which action most directly increases net worth over time?
Ignoring savings while paying all bills
Only selling personal assets each year
Making steady contributions to savings
Taking on new credit card debt
Guadalupe owns a car valued at 14,700,has 4,750 in savings, and owes $825 on a credit card. What is her net worth?
$18,625 total net worth
$1,825 total net worth
-$1,630 total net worth
$19,450 total net worth
Which factor helps invested money grow faster than storing it in cash over many years?
Compound interest on reinvested earnings
Tax deductions on paychecks
Annual account maintenance fees
Occasional savers’ reward programs
What is one advantage of a shared investment?
Pooling resources and expertise to seek higher returns
All investors always share identical risk goals
Guaranteed achievement of every investment target
Investors must fund projects they dislike
