Budgeting & Saving
What should you use when creating a budget: gross pay or net pay?
Net Pay
Which of the following is NOT a type of credit? Installment, Closed, Open, Revolving
Closed Credit
What is included in the Cost of Attendance (COA)?
A. Tuition and fees
B. Housing and meal plans
C. Institutional health insurance
D. All of the above
D. All of the above
What is one major benefit of investing in a mutual fund?
a. It guarantees high returns with no risk
b. It is an easy way to diversify your assets
c. You have complete control over every investment decision
d. It only invests in one type of stock or bond
b. It is an easy way to diversify your assets
At what income amount are you required to file taxes if you earn more than that?
$12,950
Which is the BEST example of a clearly written financial goal?
a. save money to buy a house within the next five years
b. pay off credit card bills later this year
c. invest in an international mutual fund for retirement
d. Establish an emergency fund of $4,000 within the next 18 months
d. Establish an emergency fund of $4,000 within the next 18 months
Who uses your credit score?
-Lenders
-Insurance Companies
-Landlords
What is the FAFSA?
Free Application for Federal Student Aid, used to determine eligibility for financial aid.
What type of insurance covers lost income due to illness or injury?
Disability insurance provides this coverage
Which deduction is mandatory on your paycheck?
a. Federal Income Tax
b. Health Care
c. Life Insurance
d. Disability Tax
a. Federal Income Taxa. Medicaid Tax
Why is it important to start saving early in your working career?
A. You won’t need to create a budget later
B. It allows you to build good credit automatically
C. You can take advantage of compound interest over time
D. Saving early means you won’t ever need a loan
C. You can take advantage of compound interest over time
What is one effective way to improve or maintain a good credit score?
-pay your bills on time
-do not borrow more then you can pay back
-only borrow what you need
-know how much you owe
-do not apply for too many credit cards
What is the main difference between a student loan and a scholarship/grant?
Student loans must be repaid; scholarships and grants are free money that do not need to be paid back.
Why should you not “put all your eggs in one basket” financially?
Because it increases risk—if one investment fails, you could lose everything
Which of the following statements is TRUE about self-employed workers and taxes?
A) Self-employed workers must file taxes if they earn more than $1,000 per year
B) Self-employed workers must file taxes if they earn more than $400 per year
C) Self-employed workers do not file unless they own a registered business
D) Self-employed workers may choose to file if income is under $600 per year
B) Self-employed workers must file taxes if they earn more than $400 per year
What should you do if your expenses exceed your income in a given month?
A) Borrow money from family or friends
B) Cut unnecessary spending and revisit your budget
C) Ignore it and hope it balances out next month
D) Increase your debt payments
B) Cut unnecessary spending and revisit your budget
Why should people be concerned about identity theft?
a. to save his or her job
b. to maximize his or her opportunities
c. to reduce time for record keeping
d. to protect his or her financial assets
d. to protect his or her financial assetsTo protect their financial assets and avoid long-term damage to their credit.
What are two common ways students can reduce their college expenses without taking out loans?
-live at home
-get a part time job
-apply for scholarships
Which BEST describes the relationship between insurance and risk?
a. As insurance premiums increase, risk decreases
b. As risk increases, insurance premiums increase
c. Risk is voluntary, insurance is mandatory
d. Insurance is voluntary, risk is mandatory
b. As risk increases, insurance premiums increase
Can you file an income tax return if your parents claim you as a dependent?
A) No, you can’t file twice
B) Yes, but only if you are over the age of 21.
C) Yes, even if your parents claim you as a dependent on their tax return you can still file your own return.
D) No, you can only file an income tax return if you are not claimed as a dependent by someone else.
C. Yes, even if your parents claim you as a dependent on their tax return you can still file your own return.
How does a budget help you prioritize your spending and saving
a. Allows you to make impulse purchases without worrying
b. Maximizes discretionary spending
c. Requires you to analyze money use
d. Guarantees future income
c. Requires you to analyze money use
What are the five main factors that make up your credit score?
-Payment history
-amounts owed
-length of credit history
-types of credit
-new credit
What are two key differences between federal and private student loans?
Federal student loans have fixed interest rates, private has variable
Federal student loans offer payment plans, private do not
Federal student loans do not need a co-signer, private does
What is one strategy to reduce your insurance premiums?
Increasing your deductible can help lower your monthly premium.
Sophia worked at a summer camp and earned $1,200. Federal taxes were withheld from her paycheck. She is claimed as a dependent. Does she need to file a tax return? Should she?
No she is not legally required but she should to possibly get a refund.