Financial Literacy Test 3

You have earned $3000 at your job. After taxes, Social Security, and Medicare are deducted, your take-home pay is $2500. Which is true?

• Your gross pay is $3000, and net pay is $2500.

• Your gross pay is $2500, and net pay is $3000.

Which will reduce the amount of money you spend on food?

• cooking at home

• dining at restaurants

• drinking more soda and coffee

Which would be considered a variable cost in someone's budget?

• electricity bill

• rent

• care insurance premium

What does "pay yourself first" mean?

• Put some money from your paycheck into a savings account before you spend it.

• At the end of each month put your leftover money into a savings account.

• Become self-employed.

Which is false?

• savings accounts typically earn higher returns than investments in the stock market

• if you keep your money in an FDIC-insured bank, your money is safe

• most banks pay interest on the money you deposit into your savings account

Which is considered a a long-term financial goal?

• retirement

• college tuition

• a new cell phone

• dinner with a friend

Experts recommend that you keep 3 to 6 ___ of expenses in your emergency funds.

• weeks

• months

• years

Where does the money come from when you use your debit card?

• credit card company

• checking account

• savings account

You have $10 in your checking account. You buy dinner for $12 dollars using your debit card. What will probably happen?

• your bank will charge you an overdraft fee that you will need to pay

• the bank will close your account

• nothing will happen

If you get a text alert from your bank stating that the balance is below $100 due to several $20 ATM withdrawals, and you have not been using an ATM, what should you do?

• Contact the bank immediately. Your account may have been hacked.

• Wait for your monthly statement to see what happened.

• Wait a week. It's common for banks to catch mistakes like this.