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Financial Literacy - 1 Flashcards | StudBud
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Financial Literacy - 1
Financial Literacy - 1
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Flashcards
15 cards
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Questions
15
Answers
1
Why is making timely credit card payments important?
D) It lowers your spending limit permanently
A) It builds your credit score
C) You should only pay the minimum due
B) Late payments have no consequences
2
What is the purpose of a 401(k) plan?
D) A stock trading strategy
B) A retirement savings plan offered by some employers
C) A government tax form
A) It’s a savings account for emergency funds
3
Which of the following is a good investment tip?
B) Use apps from reputable financial institutions to start investing
C) Invest only in high-risk stocks
A) Avoid investing until retirement
D) Withdraw investments frequently
4
What percentage of income does the 50/20/30 rule allocate to savings?
50%
30%
10%
20%
5
Which of the following is NOT a SMART financial goal?
A) Saving $500 for a laptop in six months
C) Hoping to become a millionaire with no plan
D) Budgeting to pay off a $1,000 credit card bill in a year
B) Earning an extra $200 monthly from a side hustle
6
Why is saving money important?
D) All of the above
C) It provides flexibility for future opportunities
A) It allows you to handle unexpected expenses
B) It helps build financial stability
7
What is the main difference between saving and investing?
B) Investing has higher risk but can provide higher returns
A) Saving has higher risk and returns than investing
C) Saving is only for emergencies
D) Investing is completely risk-free
8
Which strategy helps automate saving?
B) Automating savings through a bank
A) Setting aside money only when you remember
C) Spending first, saving what’s left
D) Investing all your money instead
9
How does financial literacy reduce stress?
D) It means you never need to budget
C) It eliminates all expenses
B) It guarantees you’ll never have debt
A) It helps you make informed financial decisions
10
Which of the following is NOT one of the five key concepts of money management?
C) Investing
A) Budgeting
B) Saving
D) Tax evasion
11
Which of the following is an example of a fixed expense
D) Car repairs
A) Groceries
C) Fast food
B) Rent
12
What is one of the best financial tips for young people?
C) Avoid saving until you’re an adult
A) Start working early and learning money management
B) Spend all your money since you’re young
D) Only use cash, never bank accounts
13
Why should you start planning for retirement early?
C) Retirement planning is only for older adults
A) It helps build long-term financial stability
B) It prevents you from ever having to work
D) It guarantees millions in savings
14
What is financial literacy?
D) Only budgeting
The abillity to make money quickly
C) Memorizing stock prices
B) Knowledge of financial concepts and decision-making
15
What should you consider before taking out a loan?
B) The color of the bank’s logo
C) Whether your friend got the same loan
A) Repayment terms and interest rates
D) None of the above
