Understanding of Your Personal Finances

MULTIPLE CHOICE o Circle the letter next to the correct answer. 1. To gain an understanding of your personal finances, you should know . . . A. Your financial goals C. How much income you have B. Where you stand financially, how much income you have, what goals you want to set, and how you’ll reach those goals D. Your investment portfolio and your financial advisors’ contact information 2. Avoiding debt can give you financial peace and a sense of hope for the future. A. True B. False 3. Why is tracking your expenses throughout the month important? A. It allows you to delete categories you don’t like. C. It helps you pull money from your savings to spend in other categories. B. It gives you insight into whether you’re sticking to the budget you set. D. It really isn’t that important in the long run. 4. Why is budgeting so important? A. It’s a good way to make sure all your money is spent by the end of the month. C. It gives you control of your money and sets you up for financial success in the future. B. It helps you figure out the best way to justify purchases that maybe aren’t necessary. D. It helps you brush up on your math skills. 5. The main reasons you should save your hard-earned money are so you can . . . A. Cover emergencies, pay cash for large purchases, and build wealth C. Buy gifts, donate to charities, and build up a college fund for your kids B. Afford for your dream home, buy your dream car, and go on your dream vacation D. Invest, indulge, and influence 6. What is The First Foundation? A. Open a checking account. C. Build wealth and give. B. Save a $500 emergency fund. D. Pay cash for college. 7. Your monthly rent payment is an example of a variable expense. A. True B. False MULTIPLE CHOICE o Circle the letter next to the correct answer. 8. The first priority in your budget should be . A. Investing C. Spending B. Saving D. Giving 9. Why do some accounts, like saving accounts at your local bank, earn interest? A. Because you deposit money, adding to your principal each month B. Because the bank pays you for the use of your money. C. Because of inflation D. Because those accounts always have great interest rates 10. Which two habits are the most important for building wealth and becoming a millionaire? A. Working a high-paying job and relying on a trust fund C. Consistently investing money and giving it time to grow B. Investing into the right stocks and using a private CPA D. Always paying off your credit card on time and putting extra money into a retirement account 11. What is The Second Foundation? A. Get out and stay out of debt. C. Pay cash for your car. B. Save a $500 emergency fund. D. Build wealth and give. 12. When you buy with credit, you typically spend more than you would with cash or a debit card. A. True B. False 13. Something that credit card commercials don’t show you is . . . A. People making payments for months or years on those credit card purchases C. How happy your parents will be that they don’t have to lend you cash anymore B. How much your credit score will grow right away D. How great your life will be with payments 14. When you finance a new car, you will end up paying more than the sticker price. A. True B. False 15. Creating a budget, having clear money goals, and slowing down to think through a purchase are all practices of a . A. College student C. Foolish consumer B. Wise consumer D. Free spirit MULTIPLE CHOICE o Circle the letter next to the correct answer. 16. Americans spend over $2,100 a year on . A. Impulse purchases C. Groceries and eating out B. Entertainment D. Credit card fees 17. The very best investment you can make is in . A. Yourself C. Real estate B. The stock market D. A new car 18. Job shadowing is a great way to gain experience in a career field. A. True B. False 19. Many employers will research job candidates’ social media posts. A. True B. False 20. Many service industries, including massage therapy, financial services, auto repair, electrical work, and plumbing, don’t require four-year degrees. A. True B. False 21. You can fund your education by finding the right mix of , , and A. Cash; loans; grants C. Work; loans; cash B. Grants; scholarships; work D. Scholarships; trust funds; federal aid . 22. Student loans are a type of “good” debt. A. True B. False 23. 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 . A. What kind of accounts you want C. How large your savings account is B. What type of home you want to own someday D. If you want to go to an Ivy League or community college 24. You need to track everything that involves money, including . . . A. Your clothing budget for the month B. Debit card purchases, third-party app transactions, and ATM withdrawals C. All of the sales that are currently happening D. The latest retail store credit card offers MULTIPLE CHOICE o Circle the letter next to the correct answer. 25. Insurance helps you transfer the from your bank account to the insurance company. A. Risk C. Insurance B. Money D. Health 26. Getting good grades, driving safely, and driving an older car are examples of ways you can . . . A. Lower your auto insurance costs C. Raise your monthly premiums B. Avoid getting into an accident D. Pass your driver’s ed test 27. Every American who earns an income must file a each year. A. Tax deduction C. Tax extension B. Paycheck D. Federal tax return 28. Using online tax software or hiring a tax professional are both good options depending on your situation. A. True B. False 29. What does cost of living refer to? A. How much of your monthly income is budgeted specifically for your rent or mortgage C. The level of wealth, comfort, material goods, and necessities available to a group of people B. The average cost of the basic goods and services needed to maintain a certain standard of living D. How wealthy or poor you are at the time of purchasing your first home 30. A leasing contract . . . A. Can be terminated at any time without any fees or penalties C. Is something a roommate owes taxes on when they move in with the current renter B. Is a legal document that allows the renter (tenant) to use the property for a period of time D. Should be signed immediately, even before reading it 31. When you invest in a mutual fund, you are contributing to a pool of money that will be . . . A. Given to hundreds of local charities in your area C. Taxed based on each individual investor’s annual salary B. Invested in a mix of stocks, bonds, and money market accounts D. Put into a separate savings account for your children to inherit someday