D/S Unit 1 Review Question Preview (ID: 34351)
Final Review.
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Instead of borrowing money for large purchases, you should set money aside in a ________ overtime and pay with cash.
a) Sinking fund
b) Emergency fund
c) Credit card fund
d) Mortgage fund
What does it mean to have a negative savings rate?
a) Spending more money than you make and acquiring debt
b) Having no savings at all
c) Having a fully funded emergency fund
d) Saving for something that is a want instead of a need
The saving habits of Ben and Arthur best illustrate which principle of saving?
a) Both interest rate and length of time matter
b) The length of time money is invested matters.
c) The amount of the initial investment is the key.
d) Rate of return matters.
At your age, a fully funded emergency fund should be:
a) $500
b) $100
c) $5000
d) $1000
Which of the following is a reason that people donʹt save money?
a) All of these
b) They lack discipline
c) They lack focus
d) They do not live on a budget
Why is having a fully funded emergency fund so important when it comes to your financial well-being?
a) The purpose of an emergency fund is to set money aside for financial emergencies and to provide a sense of financial security
b) The purpose of an emergency fund is to have money set aside for large purchases, like vacations.
c) As long as you have a good-paying job, you really donʹt need an emergency fund.
d) None of these
Which of the following is a consequence of overdrawing your checking account?
a) All of these
b) Bounced check fee from the store
c) Stress from money mismanagement
d) Overdraft fee from your bank
Doing a budget does not:
a) Make overspending more likely
b) Show if you are overspending in an area
c) Remove guilt and shame sometimes associated with a purchase
d) Make your money go further
Your monthly budget should include:
a) All of these
b) Variable expenses
c) Fixed expenses
d) Discretionary expenses
The zero-based budget is the best method of budgeting because:
a) The zero-based budget ensures that every dollar you make is assigned a specific purpose
b) Sticking to a zero-based budget requires less discipline
c) A zero-based budget allows less money for wants
d) This type of budget is less complicated than other types of budgets
Which of the following account records would have the most current balance?
a) Your own account register
b) Account balance statement from the ATM
c) Account balance statement from the ATM
d) All of these records will have accurate account balances
Your income level greatly affects your saving habits.
a) True
b) False
c)
d)
Americans typically maintain a very high savings rate.
a) False
b) True
c)
d)
You should save money for three basic reasons: emergency fund, purchases and wealth building.
a) True
b) False
c)
d)
When youʹre older and out of school, youʹll need to grow your emergency fund into a full three to six monthsʹ worth of expenses.
a) True
b) False
c)
d)
The number-one cause of divorce in North America today is stress and disagreements over money.
a) True
b) False
c)
d)
The envelope system works great for managing spending on things that donʹt normally have a fixed monthly expense.
a) True
b) False
c)
d)
If you write a zero-based budget every month, it is not necessary to reconcile your account.
a) False
b) True
c)
d)
Budgeting is crucial to your financial success.
a) True
b) False
c)
d)
A debit card cannot be used for online purchases.
a) False
b) True
c)
d)
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