Personal Financial Responsibility

Caleb is shopping for a mountain bike for a trip in 3 months. He has $750 saved and is saving $50 a week. The mountain he wants costs $1250, but it is on sale for 20% off. Should James...

• Use his savings to buy the bike now and put the amount he is short on a credit card.

• Wait until he has enough saved and buy the bike later for full price with his savings.

The Smiths want to move into the fancy neighborhood by the golf course, but the monthly payments would be so much more that they would not be able to put any money into savings. Should they...

• Buy the house and enjoy living by the golf course and watch their spending until one of them gets a pay raise.

• Buy a home within their budget and continue to add to their savings account each month.

Sarah has $5,000 in savings and saves $200 each month. She wants to buy a used car for $8,500 because it is newer than her current car. Should Sarah...

• Use her $5,500 toward the car and finance the $2,500 at an interest rate of 3.75%.

• Keep saving $200 each month until she has saved enough to buy the car.

Jessica has a part-time job and makes about $400 each month. She needs to save to help pay for her first car. Should she...

• Set up a direct deposit for a set amount to go to her savings account on her pay days.

• Wait until the end of the month and save any remaining money from her paycheck.

Being financially responsible means that you pay only the minimum amount on your credit card each month?

• True

• False

Being financially responsible means setting aside a percentage of your paycheck each month to put into savings.

• True

• False

Late credit card payments can

• increase your interest rate
• incur penalties and additional fees
• hurt your credit score
• all of these

Being financially responsible means that you look for a credit card with the highest possible interest rate.

• True

• False

Answer explanation

You want the lowest rate.

Being financially responsible means that you check your account balances after making a purchase.

• True

• False

Answer explanation

You should check your bank account BEFORE making a purchase to make sure that you have enough money in your account and avoid overdraft fees.

Being financially responsible means that when you spend money on something that you want, it fits into your budget.

• True

• False