Budgeting & Money Management
Which of the following is considered a fixed expense?
A. Grocery bill
B. Monthly rent payment
C. Electricity bill
D. Clothing purchases
B. Monthly rent payment
What is the initial money deposited into a savings account called?
A. Interest
B. Dividend
C. Principal
D. Collateral
C. Principal
What does APR stand for in credit and loan agreements?
A. Automated Payment Ratio
B. Actual Principal Return
C. Annual Percentage Rate
D. Annual Payment Reserve
C. Annual Percentage Rate
What is impulse buying?
A. Setting up automated monthly contributions to an emergency fund.
B. Purchasing items based on sudden, unplanned urges rather than careful planning.
C. Comparing interest rates before opening a savings account.
D. Creating a zero-based budget at the start of the month
B. Purchasing items based on sudden, unplanned urges rather than careful planning.
What does the S stand for in S.M.A.R.T. goals?
A. Simple
B. Specific
C. Systematic
D. Swift
B. Specific
What is net income?
A. The total amount of money earned before taxes and deductions.
B. Money received exclusively from business investments.
C. Take-home pay remaining after taxes, deductions, and withholdings are removed.
D. The total budget allocated for discretionary spending.
C. Take-home pay remaining after taxes, deductions, and withholdings are removed.
What government agency protects deposits in traditional banks up to $250,000?
A. FDIC
B. NCUA
C. IRS
D. FAFSA
A. FDIC
What is a secured credit card?
A. A card that requires a cash deposit upfront to serve as collateral.
B. A card with no annual fee and unlimited cash back.
C. A student loan backed by the federal government.
D. A loan that uses a home as collateral.
A. A card that requires a cash deposit upfront to serve as collateral.
What is an opportunity cost?
A. The money saved in a bank account earning compound interest.
B. The fee charged by a bank for overdrafting an account.
C. The total interest paid on a 36-month car loan.
D. The value of the next best alternative given up when making a financial choice.
D. The value of the next best alternative given up when making a financial choice.
How many career clusters are outlined in the Common Career Technical Core (CCTC)?
A. 10
B. 12
C. 16
D. 20
C. 16
What is a zero-based budget?
A. A budget method where income minus all expenses, savings, and giving equals zero.
B. A budget where you spend zero dollars on entertainment.
C. A budget that is never updated or reviewed.
D. A plan that relies entirely on credit card debt.
A. A budget method where income minus all expenses, savings, and giving equals zero.
Which type of savings account requires you to leave your money locked in for a specific time period in exchange for a higher interest rate?
A. Traditional savings account
B. Checking account
C. Money market account
D. Certificate of Deposit
D. Certificate of Deposit
What factor has the largest impact on your FICO credit score, making up 35% of the score?
A. Amounts owed
B. Length of credit history
C. New credit inquiries
D. Payment history
D. Payment history
What does the phrase "Pay Yourself First" mean?
A. Automatically setting aside money for savings and investments before paying other expenses.
B. Spending your entire paycheck on personal wants before paying bills.
C. Using credit cards to fund daily purchases.
D. Withdrawing cash from an ATM without recording it.
A. Automatically setting aside money for savings and investments before paying other expenses.
Which of the following represents the two types of student loans offered through the FAFSA program?
A. Secured business loans and Balloon payment loans
B. Private credit loans and Mortgage loans
C. Subsidized loans and Unsubsidized loans
D. Equity loans and Overdraft loans
C. Subsidized loans and Unsubsidized loans
What is a sinking fund?
A. An emergency reserve for unexpected job loss.
B. A high-risk investment in the stock market.
C. Money lost due to bank overdraft fees.
D. A strategic fund created by setting aside money monthly for a known future expense.
D. A strategic fund created by setting aside money monthly for a known future expense.
Which of the following best defines liquidity in personal finance?
A. The total interest accumulated on a loan over ten years.
B. How quickly an asset can be converted into cash without losing value.
C. The ratio of fixed expenses to variable expenses in a budget.
D. The penalty fee charged for closing an inactive credit card.
B. How quickly an asset can be converted into cash without losing value.
What is a balloon payment?
A. The minimum monthly payment required on a credit card.
B. A large lump-sum payment due at the end of a relatively short loan repayment period.
C. An annual fee charged by credit card issuers.
D. A penalty fee for early withdrawal from a certificate of deposit.
B. A large lump-sum payment due at the end of a relatively short loan repayment period.
What are the 3 R's in purchase decision making?
A. Reduce, Reuse, Recycle
B. Rate, Risk, Return
C. Reality, Responsibility, Restraint
D. Revenue, Recovery, Reinvestme
C. Reality, Responsibility, Restraint
What is the primary focus of career self-assessment?
A. Calculating the monthly interest on a 72-month car loan.
B. Identifying personal skills, values, needs, attributes, and lifestyle choices to guide career planning.
C. Managing bank checking account reconciliation statements.
D. Determining credit card utilization ratios.
B. Identifying personal skills, values, needs, attributes, and lifestyle choices to guide career planning.
What does a debt-to-income ratio (DTI) measure?
A. The total amount of savings divided by annual expenses.
B. The percentage of gross monthly income that goes toward paying monthly debt.
C. The interest rate charged on a traditional savings account.
D. The ratio of fixed needs to discretionary wants
B. The percentage of gross monthly income that goes toward paying monthly debt.
Which type of endorsement involves simply signing your name on the back of a check?
A. Restrictive endorsement
B. Blank endorsement
C. Special endorsement
D. Conditional endorsement
B. Blank endorsement
Why might choosing a longer loan term (such as 72 months instead of 36 months for a car loan) result in paying more overall?
A. Shorter terms always have higher interest rates.
B. Longer terms eliminate all monthly fees.
C. Interest accumulates over a longer period, increasing total financing costs.
D. Banks penalize borrowers for paying off loans early.
C. Interest accumulates over a longer period, increasing total financing costs.
How do personal financial tools such as budgeting, savings, and checking accounts help you manage credit and avoid long-term debt?
A. They automatically eliminate interest charges and taxes on all credit card purchases.
B. They track cash flow, cover unexpected costs without debt, and ensure timely payments.
C. They guarantee an automatic 850 FICO credit score within six months of opening accounts.
D. They transfer personal debt to federal consumer protection agencies.
B. They track cash flow, cover unexpected costs without debt, and ensure timely payments.
How do your personal career goals and self-assessments directly shape your long-term financial budget and credit options?
A. Career choices determine earning potential and stability, guiding baseline budget limits and borrowing options.
B. They automatically increase your salary to match inflation regardless of job performance.
C. They eliminate the need for tax withholdings and monthly fixed expenses.
D. They force banks to lower interest rates on all personal mortgages.
A. Career choices determine earning potential and stability, guiding baseline budget limits and borrowing options.