WorksheetsCourse Test
Total questions: 51
Worksheet time: 26mins
To gain an understanding of your personal finances, you should know . . .
Your financial goals
Where you stand financially, how much income you have, what goals you want to set, and how you’ll reach those goals
How much income you have
Your investment portfolio and your financial advisors’ contact information
Avoiding debt can give you financial peace and a sense of hope for the future.
True
False
Why is tracking your expenses throughout the month important?
It allows you to delete categories you don’t like.
It gives you insight into whether you’re sticking to the budget you set.
It helps you pull money from your savings to spend in other categories.
It really isn’t that important in the long run.
Why is budgeting so important?
It’s a good way to make sure all your money is spent by the end of the month.
It helps you figure out the best way to justify purchases that maybe aren’t necessary.
It gives you control of your money and sets you up for financial success in the future.
It helps you brush up on your math skills.
The main reasons you should save your hard-earned money are so you can . . .
Cover emergencies, pay cash for large purchases, and build wealth
Afford for your dream home, buy your dream car, and go on your dream vacation
Buy gifts, donate to charities, and build up a college fund for your kids
Invest, indulge, and influence
What is The First Foundation?
Open a checking account.
Save a $500 emergency fund.
Build wealth and give.
Pay cash for college.
Your monthly rent payment is an example of a variable expense.
True
False
The first priority in your budget should be ________.
Investing
Saving
Spending
Giving
Why do some accounts, like saving accounts at your local bank, earn interest?
Because you deposit money, adding to your principal each month
Because the bank pays you for the use of your money.
Because of inflation
Because those accounts always have great interest rates
Which two habits are the most important for building wealth and becoming a millionaire?
Working a high-paying job and relying on a trust fund
Investing into the right stocks and using a private CPA
Consistently investing money and giving it time to grow
Always paying off your credit card on time and putting extra money into a retirement account
What is The Second Foundation?
Get out and stay out of debt.
Save a $500 emergency fund.
Pay cash for your car.
Build wealth and give.
When you buy with credit, you typically spend more than you would with cash or a debit card.
True
False
Something that credit card commercials don’t show you is . . .
People making payments for months or years on those credit card purchases
How much your credit score will grow right away
How happy your parents will be that they don’t have to lend you cash anymore
How great your life will be with payments
When you finance a new car, you will end up paying more than the sticker price.
True
False
Creating a budget, having clear money goals, and slowing down to think through a purchase are all practices of a ________.
College student
Wise consumer
Foolish consumer
Free spirit
Americans spend over $2,100 a year on ________.
Impulse purchases
Entertainment
Groceries and eating out
Credit card fees
The very best investment you can make is in ________.
Yourself
The stock market
Real estate
A new car
Job shadowing is a great way to gain experience in a career field.
True
False
Many employers will research job candidates’ social media posts.
True
False
Many service industries, including massage therapy, financial services, auto repair, electrical work, and plumbing, don’t require four-year degrees.
True
False
You can fund your education by finding the right mix of ________, ________, and ________.
Cash; loans; grants
Grants; scholarships; work
Work; loans; cash
Scholarships; trust funds; federal aid
Student loans are a type of “good” debt.
True
False
When deciding on the right bank for you, you should first identify what type of bank you want, the features that matter most to you, and ________.
What kind of accounts you want
What type of home you want to own someday
How large your savings account is
If you want to go to an Ivy League or community college
You need to track everything that involves money, including . . .
Your clothing budget for the month
Debit card purchases, third-party app transactions, and ATM withdrawals
All of the sales that are currently happening
The latest retail store credit card offers
Insurance helps you transfer the ________ from your bank account to the insurance company.
Risk
Money
Insurance
Health
Getting good grades, driving safely, and driving an older car are examples of ways you can . . .
Lower your auto insurance costs
Avoid getting into an accident
Raise your monthly premiums
Pass your driver’s ed test
Every American who earns an income must file a ________ each year.
Tax deduction
Paycheck
Tax extension
Federal tax return
Using online tax software or hiring a tax professional are both good options depending on your situation.
True
False
What does cost of living refer to?
How much of your monthly income is budgeted specifically for your rent or mortgage
The average cost of the basic goods and services needed to maintain a certain standard of living
The level of wealth, comfort, material goods, and necessities available to a group of people
How wealthy or poor you are at the time of purchasing your first home
A leasing contract . . .
Can be terminated at any time without any fees or penalties
Is a legal document that allows the renter (tenant) to use the property for a period of time
Is something a roommate owes taxes on when they move in with the current renter
Should be signed immediately, even before reading it
When you invest in a mutual fund, you are contributing to a pool of money that will be . . .
Given to hundreds of local charities in your area
Invested in a mix of stocks, bonds, and money market accounts
Taxed based on each individual investor’s annual salary
Put into a separate savings account for your children to inherit someday
________ is key when it comes to compound growth.
Time
Money
Attitude
Roth IRA
Inflation, deflation, the rate of economic growth, price levels, national income, changes in employment rates, and GDP are all called . . .
Stock markets
Global economy
Developing countries
Economic indicators
Economics is a study of consumer ________.
Choices
Availability
Supply
Demand
Use what you’ve learned in this chapter to answer these questions. Why is personal finance dependent on behavior?
Because day-to-day choices about spending and saving determine outcomes more than income or knowledge alone
Because government rules decide everyone’s financial results
Because the stock market guarantees long‑term profits regardless of choices
Because banks manage your money for you without your input
Use what you’ve learned in this chapter to answer these questions. What are some key components of successful budgeting? Select all that apply.
Tracking all income and expenses
Setting clear, realistic goals for your money
Creating and following a zero‑based spending plan
Ignoring small purchases to save time
Reviewing and adjusting the budget regularly
Use what you’ve learned in this chapter to answer these questions. How does planning and saving for your future help you build wealth?
It allows your money to grow over time through interest and investing while preparing for future expenses
It eliminates all taxes on your income
It guarantees you will never need to borrow money
It increases your credit score automatically
Use what you’ve learned in this chapter to answer these questions. List three ways the credit card industry makes money off of customers. Select all that apply.
Interest charged on carried balances
Late payment and penalty fees
Annual fees and cash‑advance fees
Interchange (merchant) fees on transactions
Rebates paid to cardholders
Use what you’ve learned in this chapter to answer these questions. List some examples of how a thief would commit card fraud. Select all that apply.
Using a skimmer to capture card data at an ATM or gas pump
Phishing to trick a cardholder into revealing numbers and security codes
Creating a counterfeit card from stolen data and making purchases
Making online purchases with a stolen card number
Calling the bank to request a lower interest rate
Use what you’ve learned in this chapter to answer these questions. What are two questions smart spenders ask before making a purchase? Select all that apply.
Do I really need this or can I wait?
Can I afford this within my budget without using debt?
Is there a better price or alternative available?
How will this purchase affect my financial goals?
Will my friends be impressed if I buy this?
Use what you’ve learned in this chapter to answer these questions. What’s the difference between soft skills and hard skills?
Soft skills are interpersonal and work‑habit abilities, while hard skills are technical, measurable abilities
Soft skills are computer certifications, while hard skills are people skills
Soft skills are learned only in college, while hard skills are learned on the job
Soft skills are permanent, while hard skills change every year
Use what you’ve learned in this chapter to answer these questions. List five non‑college options available for postsecondary education. Select all that apply.
Trade or technical school
Apprenticeship programs
Military service with training
Starting a small business (entrepreneurship)
Industry certification or credential programs
Use what you’ve learned in this chapter to answer these questions. Describe the process of balancing your checking account.
Compare your check register with the bank statement, account for outstanding checks/deposits, and correct any errors
Withdraw all cash at month‑end and start over
Only check your balance online and ignore the statement
Close the account every month and open a new one to avoid errors
Use what you’ve learned in this chapter to answer these questions. Explain the difference between gross income and net income.
Gross income is total pay before deductions; net income is take‑home pay after taxes and other deductions
Gross income is after taxes; net income is before taxes
Gross income includes only wages; net income includes wages and tips
Gross income is hourly pay; net income is salary
Identify The Five Foundations and describe each of them. Select all items that are part of The Five Foundations.
Save a $500 emergency fund
Get out of debt
Pay cash for your car
Pay cash for college
Build wealth and give
Identify The Five Foundations and describe each of them. Which outcome best explains how following these steps will help you manage your money right now?
You will rely less on debt and start building savings and good habits immediately
You will increase impulsive spending because cash is always on hand
You will delay budgeting until your income is much higher
You will borrow more to take advantage of rewards programs
What are the main differences between saving and investing?
Saving is for short-term goals with low risk and high liquidity; investing seeks long-term growth with higher risk and volatility
Saving is for long-term growth with high risk; investing is for short-term needs with guaranteed returns
Saving and investing are identical because both guarantee your principal
Saving requires borrowing; investing eliminates the need for any savings
What is your current dream job? Choose the statement that best explains how a dream job should fit with your talents, values, and passion.
It aligns with your skills, core values, and interests so you can do meaningful work over time
It offers the highest starting salary regardless of your abilities or interests
It matches what most of your friends are choosing so you can fit in
It requires the least effort and training even if it does not interest you
Why is it important for students to think about what they want to do before pursuing a college education? What kind of education is right for you, based on what you’re passionate about? Choose the best answer.
Clarifying goals helps you choose an education path that fits—such as trade school, community college, apprenticeship, or university—and avoid unnecessary time and debt
Colleges legally require students to declare a lifelong career before admission
The main reason is to qualify for more credit card offers while on campus
Choosing the most prestigious and expensive university is always best regardless of goals
Why is it important to do The Five Foundations in order?
Each step builds on the previous one to create a strong financial base
The order does not matter as long as you eventually do them all
Completing them out of order earns more credit card rewards
Banks require the official order to open a checking account
Explain how debt can hold someone back from living like no one else after retirement.
Debt payments reduce cash flow and savings, leaving less income in retirement and creating ongoing obligations
Debt improves credit so retirees can travel more and retire earlier
All debts are automatically forgiven at retirement, so there is no impact
Debt increases passive income and replaces the need for retirement savings
