Saving & Budgeting
Which of these costs would be the MOST difficult to adjust if you were looking to reduce your expenses?
a. Dining out at local restaurants
b. loan payment of a new car
c. Expenses for new clothes.
d. Postponing a purchase for a big screen TV
b. loan payment of a new car
T/F: Disposable income is the money you have left over after you subtract your income taxes from your income
True
Leila just graduated from college and is comparing a few different cities to move to. Which of these factors is the LEAST important thing for her to consider right now?
a. Average rent for an apartment
b. Food and grocery store options in the area
c. Employment opportunities
d. Average cost of Uber, Lyft, or taxi fare
d. Average cost of Uber, Lyft, or taxi fare
What are two main aspects of financial literacy?
Budgeting and Investing
This document lists your income and taxes taken out by your employer.
What is a pay stub?
Which of the following is a sign that you have a budget deficit?
a. Your savings account balance grows every month.
b. You overdraw your checking account on a consistent basis (with a $34 cost per overdraft).
c. Your checking account balance grows every month.
d. You pay more than the minimum monthly loan payment towards your student loans.
You overdraw your checking account on a consistent basis (with a $34 cost per overdraft).
T/F: A deficit is when your expenses exceed your income.
True
John wants to buy a car and is trying to decide whether he wants to accept a pre-qualified auto loan from his credit union or if he wants to directly finance the car from the dealership. What should he do?
a. Finance the car directly with the dealership since they always have better interest rates.
b. Compare the two offers and choose the one through which he’d pay the least amount of money overall.
c. Finance the car with the credit union - since they’re a local organization, they always have the customers’ best interests at heart.
d. Compare the two offers and choose the one with the longest term so that he has more time to pay it off
b. Compare the two offers and choose the one through which he’d pay the least amount of money overall.
Why is learning about savings and investments important?
It is important to learn about savings and investments as it can help building financial security and achieving long-term financial goals
You should aim to have this many months of expenses saved in an emergency fund.
3 to 6 months?
Greg is trying to decide whether he needs a car or not when he moves to the city. Which of the following would convince Greg to get a car rather than use public transportation?
a. There are several public transportation routes between Greg's apartment and work.
b. The cost of public transportation is less than Greg’s monthly car payment.
c. Greg’s company covers half the cost of his monthly public transportation pass.
d. Using public transportation, Greg’s commute to work one-way is two hours.
d. Using public transportation, Greg’s commute to work one-way is two hours.
You earn a salary of $40,000 per year and decide to save 20% of your gross pay. You then set a goal of creating a $16,000 emergency fund. How long will it take for you to achieve your goal?
a. 6 months
b. 1 year
c. 2 years
d. 3 years
c. 2 years
This is money you earn from your money, such as interest or dividends
passive income?
What is Financial Literacy
Financial literacy refers to the ability to understand and effectively manage various aspects of personal finance, including budgeting, saving, investing, borrowing, and managing debt.
This tax form is used to file your annual income taxes.
a 1040
Isaiah works for the summer at a technology company and has a salary for the summer of $3,000. After Federal and state taxes, Social Security, and Medicare are deducted, his take-home pay is $2,500. Which of the statements below is correct?
a. His gross pay is $2,500 and net pay is $3,000.
b. His gross and net pay are $3,000.
c. His gross and net pay are $2,500.
d. His gross pay is $3,000 and net pay is $2,500.
Isaiah works for the summer at a technology company and has a salary for the summer of $3,000. After Federal and state taxes, Social Security, and Medicare are deducted, his take-home pay is $2,500. Which of the statements below is correct?
a. His gross pay is $2,500 and net pay is $3,000.
b. His gross and net pay are $3,000.
c. His gross and net pay are $2,500.
d. His gross pay is $3,000 and net pay is $2,500.
d. His gross pay is $3,000 and net pay is $2,500.
Which of the following is a BAD budgeting strategy to use if you want to save money at the grocery store?
a. Prepare a grocery list before you go to the store, and avoid buying items that aren’t on the list.
b. Build a weekly meal plan around items you already own or items that are on sale that week, rather than just choosing foods you'd like to eat.
c. When comparing similar products, focus on the price only.
d. When comparing similar products, be sure to compare based on unit price
c. When comparing similar products, focus on the price only.
This federally insures deposits up to $250,000 at most banks.
the FDIC (Federal Deposit Insurance Corporation)
Name at least 4 ways of financial literacy
Budgeting, Investing, Loans, Savings
This is a retirement savings account often offered by employers.
a 401(k)?
You are putting together your first post-graduation budget. Your take-home pay will be $2,500 per month. You estimate your monthly costs to be rent of $900, car related expenses to be $550, entertainment of $200, food expense of $250, cable bill of $75, mobile phone of $100, student loan payment of $400 and other expense of $150. How would you describe your budget after analyzing all of your income and expenses?
a. You have a surplus of $125.
b. You have a deficit of $125.
c. You have a deficit of $2,625.
d. You have a surplus of $2,500
b. You have a deficit of $125.
Which of the following is TRUE about a lease agreement?
a. A lease is an agreement between you and your roommates that you submit to the apartment owner.
b. You never have to pay any fees when you sign a lease. If you do, that means it is a scam.
c. A lease often has information about your prior housing experience; it's a record that the apartment owner can use to see if you are a good candidate.
d. A lease is an agreement that includes details about rent, apartment policies, vacating, etc.
d. A lease is an agreement that includes details about rent, apartment policies, vacating, etc.
You can legally reduce your taxable income by claiming these.
deductions
What is budgeting
The process of creating a plan for how to spend and manage money.
The earlier you invest, the more time this financial principle works in your favor.
compound interest