Key Terms
45% of Americans have less than $1,000 saved for a(n) _______________
A.) Emergency Fund
B.) Vacation Fund
C.) Car Payment
A.) Emergency Fund
Which of the following would be considered an emergency fund expense?
A. Lost cell phone
B. Video game sale
C. Blown car tire
D. Shoe sale
C. Blown car tire
What is the main purpose of a budget?
• A) To track spending and manage money
• B) To find discounts on groceries
• C) To calculate taxes
A) To track spending and manage money
Why is it important to have an emergency fund?
• A) For a new phone
• B) For unexpected expenses like car repairs
• C) For vacations
B) For unexpected expenses like car repairs
What does a credit score represent?
• A) Your income
• B) Your creditworthiness
• C) Your monthly spending
B) Your creditworthiness
The price of goods and services increases over time due to _________________
A.) Budget cuts
B.) Inflation
C.) Discounts
B.) Inflation
”Rate of return“ is a phrase used to describe what aspect of investing?
A. Compound growth
B. Accrued interest
C. Risk and return ratio
D. Inflation
A. Compound growth
Which of the following is an example of a fixed expense?
• A) Monthly rent
• B) Dining out
• C) Entertainment
A) Monthly rent
. What is a good goal for an emergency fund?
• A) 1 month of expenses
• B) 3-6 months of expenses
• C) 1 year of expenses
B) 3-6 months of expenses
Which action is most likely to improve your credit score?
• A) Making late payments
• B) Consistently paying bills on time
• C) Ignoring debt
B) Consistently paying bills on time
The initial amount of money you deposit or invest is called the _________________
A.) Profit
B.) Interest
C.) Principal
C.) Principal
In The Five Foundations, what is The Third Foundation?
A. Pay cash for college.
B. Save a $500 emergency fund.
C. Pay cash for your car.
D. Get out and stay out of debt.
C. Pay cash for your car.
What should you consider first when creating a budget?
• A) Your favorite hobbies
• B) Your income and expenses
• C) A list of your friends
B) Your income and expenses
Where is the best place to keep your emergency savings?
• A) Under your mattress
• B) In a high-yield savings account
• C) In your wallet
B) In a high-yield savings account
What is considered a good credit score range?
• A) 300-500
• B) 600-650
• C) 700-750
C) 700-750
Is the average rate of growth for an investment over a period of time
A.) Compound Growth
B.) Sales Tax
C.) Budget
A.) Compound Growth
When you make a purchase but later wish you hadn‘t done so, you experience:
A. Selfishness
B. Buyer‘s remorse
C. Impulsiveness
D. Time value
B. Buyer‘s remorse
Which expense is most likely to vary each month?
• A) Car payment
• B) Utilities
• C) Mortgage
B) Utilities
Which type of account typically earns the most interest?
• A) Checking account
• B) Standard savings account
• C) High-yield savings account
C) High-yield savings account
Which of these has the largest impact on your credit score?
• A) Number of credit cards
• B) Payment history
• C) Types of bank accounts
B) Payment history
An investment‘s ______________is its percentage of gain or loss over time
A.) Starting Amount
B.) Rate of Return
C.) Loan Term
B.) rate of return
Which of the following questions helps you determine if something is actually an emergency expense?
A. Is it urgent?
B. Is it unexpected?
C. Is it necessary?
D. All of the above
D. All of the above
If your expenses are higher than your income, what should you consider doing?
• A) Ignoring it
• B) Reducing your expenses
• C) Adding more expenses
B) Reducing your expenses
If you want to save for a long-term goal, which account could be the best choice?
• A) Checking account
• B) Certificate of deposit (CD)
• C) Credit card
B) Certificate of deposit (CD)
Why is it important to have a high credit score?
• A) It can qualify you for lower interest rates on loans
• B) It provides extra cash in your account
• C) It prevents any taxes
A) It can qualify you for lower interest rates on loans