A plan for how to spend and save your money.

Which of these is an example of bad debt?

A credit card bill you can’t afford to pay.

What’s the difference between gross and net pay?

Gross is before taxes; net is what you take home.

In the 50/30/20 rule, what does the 50% usually go toward?

Needs (like rent, food, and bills)

What happens if you spend more money than you have in your checking account?

You may be charged an overdraft fee.

Which of the following is a sign of a scam?

A company asks for your bank PIN.

What is a credit score?

A number that shows how likely you are to repay money you borrow.

What does it mean to pay interest on a loan?

You pay extra money for borrowing.

Which is the safest place to keep your emergency fund?

In a savings account at a bank.

What does a checking account help you do?

Write checks, pay bills, use a debit card.

What does it mean to "live within your means"?

Spend less than or equal to what you earn.

Why is financial literacy important?

So you can make smart money decisions.

What is a paycheck deduction?

A tax or benefit taken out of your pay.

What is compound interest?

Interest earned on your savings and on the interest it already earned.

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Financial Literacy Basics

20 termsStudBud Administration47 plays

Test your knowledge on fundamental concepts of personal finance and budgeting

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Questions 20

Answers

1
What is a Budget?
A plan for how to spend and save your money.
An application to get a loan.
A type of income tax.
A type of savings account.
2
Which of these is an example of bad debt?
An affordable loan for a used car.
A credit card bill you can’t afford to pay.
Borrowing money to attend university.
Borrowing money to start a business.
3
What’s the difference between gross and net pay?
Gross is monthly; net is weekly.
Gross is after taxes; net is before.
They mean the same thing.
Gross is before taxes; net is what you take home.
4
In the 50/30/20 rule, what does the 50% usually go toward?
Savings (like retirement and bank accounts)
Investments (like stocks and bonds)
Wants (like vacation, entertainment)
Needs (like rent, food, and bills)
5
What is one smart way to shop?
Always shop online.
Compare prices before buying.
Buy the first thing you see on sale.
Buy name brands.
6
Which of the following is a need, not a want?
Video Games
Cell phone
Sneakers
Medicine
7
Which tax helps pay for healthcare for older Americans?
Medicare
Social Security
Income tax
Sales tax
8
What happens if you spend more money than you have in your checking account?
You may earn a bonus for the difference.
The bank gives you extra time.
Nothing happens.
You may be charged an overdraft fee.
9
If you make $100 and save $20, how much have you saved?
20%
50%
80%
10%
10
Which of the following is a sign of a scam?
A store offers an unbelievable sale.
A company asks for your bank PIN.
Someone sends you a receipt.
You receive a thank-you email.
11
What is a credit score?
The amount of money you save.
The amount of credit you have available.
A number that shows how likely you are to repay money you borrow.
Your school grade in math.
12
What does it mean to pay interest on a loan?
You only pay back the amount you borrowed.
You reduce your credit score.
You pay extra money for borrowing.
You earn money.
13
Which is the safest place to keep your emergency fund?
In cash under your bed or in your closet.
In a savings account at a bank.
In a checking account at a bank.
Invested in the stock market.
14
What is the definition of income?
The money you earn or receive
The money in your savings account
The money you borrow
The amount of money you spend
15
What does a checking account help you do?
Write CD's for 6 months.
Save money in a bank.
Write checks, pay bills, use a debit card.
Invest in stocks and bonds.
16
What does it mean to "live within your means"?
Spend more than you earn.
Use mostly cash.
Spend less than or equal to what you earn.
Avoid paying high taxes.
17
Why is financial literacy important?
So you can make smart money decisions.
So you can read bank and investment brochures.
So you can pay for most things in cash.
So you can avoid asking for help.
18
What is a paycheck deduction?
Extra money you receive when you are paid.
A loan you repay.
A tax or benefit taken out of your pay.
A raise in pay.
19
Why is it important to start saving early?
Because banks require it.
To increase taxes.
So you can spend more later.
To earn more interest.
20
What is compound interest?
A type of credit card.
Interest earned on your savings and on the interest it already earned.
Interest you pay on your debt.
Money you lend with a contract for repayment.

Financial Literacy Basics Flashcards | StudBud