Budgeting And Banking Basics Final Exam

What is not a step in creating a budget?

Identifying your needs and wants
Tracking your spending
Asking for a raise

What should you prioritize when creating your budget?

Your wants
Your savings
Your needs
Your short term gains

It is important to review your budget monthly or as needed.

Yes, it is important
No, you don't ever need to review your budget

What should you do if you overspend in a certain category?

Ignore it
Adjust your budget
Cut back on essentials
Increase your income

What are some methods for tracking your spending?

Recording your spending in a notebook or on a notetaker
Saving receipts and recording them later
Using a spreadsheet
Using a budgeting app
All of the above

Why is it important to track your spending for at least a month?

To make it more difficult to spend money
To get an accurate picture of your savings habits
To get an accurate picture of your spending habits
To make you feel guilty about your spending habits

What should you take into account when making a spending plan?

Income
Expenses
Savings goals
All of the above

Which of the following is an example of a need?

Eating out
Rent
Cable TV

Which of the following is an example of a want?

A new TV
Transportation to work
Groceries

Why is it important to prioritize your needs over your wants in budgeting?

It helps you reach your financial goals
It allows you to spend more money on non-essential items
It makes budgeting more difficult

What is the first step in creating a Spending Plan?

Subtracting fixed expenses
Allocating the remaining amount
Calculating your income
Leaving room for savings

What are fixed expenses in a budget?

Expenses that vary each month
Expenses that stay the same each month
Discretionary expenses
None of the above

What should you do with the remaining amount after subtracting your fixed expenses?

Leave it unused
Allocate it towards your other expenses
Spend it on discretionary expenses
Put it towards savings

What is the purpose of reviewing and adjusting your spending plan?

To make sure it looks good
To ensure that it remains effective and relevant to your current financial situation
To impress your friends

How often should you review your spending plan?

Once a month or as needed
Once every quarter of the year
Once a year
Set it and forget it

What are the steps to review and adjust your spending plan?

Analyze your spending habits, set new financial goals, identify any changes in your expenses, and ask your boss for a promotion.
Identify any changes in your income or expenses, analyze your spending habits, reallocate your money to match your new financial situation, and set new financial goals.
Identify any changes in your income or expenses, track your spending for no more than a week, set new financial goals, and analyze your spending habits

What is a bank?

A type of restaurant.
A place where people go to exercise.
A financial institution that offers safe, secure, and convenient services to help people save money and build a better financial future.

What are some common types of banks?

Commercial Banks, Savings and Loans Associations, and Credit Unions.
Grocery stores, shopping malls, and big cities.
Checking accounts, savings accounts, and credit cards.

What services do banks offer?

Checking and savings accounts, loans, credit cards, and investment services.
Groceries, clothes, and electronics.
Gasoline, car washes, and snacks.

What should you consider when choosing a bank?

Color, size, and shape.
Location, fees and interest rates, and services offered.
TV shows, movies, and books.

What are some tips for working with a bank?

Ask for help
read before you sign
get written information.
All of the above

What is the purpose of FDIC and NCUA insurance?

To invest money in financial institutions
To protect depositors in case a financial institution fails
To insure investments made through financial institutions
To guarantee high returns on deposits

What types of accounts are typically insured by FDIC and NCUA insurance?

credit cards
Checking accounts , Savings accounts, NOW Accounts, and time deposit accounts
Mutual funds and annuities
Stocks and bonds

What is the basic FDIC and NCUA insurance coverage per depositor per insured financial institution?

FDIC and NCUA has no insurance coverage
$100,000
$250,000
There is no limit to what FDIC and NCUA cover.

What agency administers the National Credit Union Share Insurance Fund (NCUSIF)?

FDIC
NCUA
Federal Reserve
U.S. Treasury

Does FDIC and NCUA insurance cover losses from robberies and other thefts?

Yes
No

What does FDIC and NCUA insurance protect?

Deposits only
Investments only
Both deposits and investments
Neither deposits nor investments

Are investments in stocks and bonds insured by FDIC and NCUA insurance?

Yes
No

What is the full name of the federal agency that insures deposits at federally insured credit unions?

Federal Deposit Insurance Corporation (FDIC)
National Credit Union Administration (NCUA)
U.S. Treasury
Federal Reserve

What is the full name of the federal agency that insures deposits at federally insured Commercial Banks??

Federal Deposit Insurance Corporation (FDIC)
National Credit Union Administration (NCUA)
U.S. Treasury
Federal Reserve

What is an overdraft?

When you spend more money than you have in your checking account
When you save more money than you have in your savings account
When you invest more money than you have in your investment account

What is the easiest approach to preventing overdrafts?

Keeping a budget, tracking your spending, and not spending more than you have available
Ignoring your account balance and transactions
Forgetting about your bill due dates

How can personal financial management applications help you avoid overdrafts?

They can increase your chances of overdrafts
They can withdraw money from your account without your permission
They can identify useful insights to help you manage your spending

What is the importance of knowing your bill due dates?

To avoid overdrafts by timing bill payments after paydays or when you expect to see money in your checking account
To increase your chances of overdrafts

What is the benefit of leaving a small cash cushion in your checking account?

To increase your chances of overdrafts
To avoid overdrafts, even if you set up automatic bill payments before your next paycheck
To make more money from interest

What is a checking account?

A type of bank account for long-term savings
A type of bank account for managing money for everyday spending
A type of bank account for investing in the stock market
A type of bank account for borrowing money

What are the benefits of having a checking account?

Making deposits and withdrawals easily
Making payments through checks or debit cards
Keeping a record of all your transactions
All of the above

Why is it important to shop around for a checking account?

To find the account with the highest interest rate
To find the account with the lowest fees
To find the account that best meets your needs
To find the account with the most overdraft fees

What feature might a checking account offer to make it more appealing to customers?

Free ATM access
High fees for deposits and withdrawals
No record of transactions
No overdraft protection

What is online banking?

A bannking option that is only available to businesses
A banking option that requires you to visit a branch to manage your money
A banking option that requires you to visit a branch to manage your money
A digital banking option that allows you to manage your money without having to visit a branch

What are some common features of online banking?

Monitoring account activity, viewing deposits and withdrawals, and applying for loans or credit cards
Paying bills and transferring funds
Both A and B

What is mobile banking?

A digital banking option that allows you to manage your money on your mobile device
A banking option that requires you to visit a branch to manage your money
A banking option that is only available to businesses

What are some features of mobile banking?

Depositing checks by taking and submitting a picture, viewing account activity, and transferring funds
Scheduling payments, tracking spending, and building savings
Both A and B

What is online bill pay?

A service that allows you to pay your bills in person at a bank branch
A service that allows you to pay your bills online instead of writing and mailing paper checks
A service that is only available to businesses

What is a benefit of having a savings account?

Access to credit
Avoiding taxes
Earning interest on your savings

What is an interest rate?

A fee charged by banks
A percentage of your savings account balance
A type of investment

Why do online banks tend to offer higher interest rates?

They have lower overhead costs
They have better customer service
They have more physical branches

What is a high yield savings account?

A savings account with no minimum balance
A type of investment
A savings account with an unusually high interest rate

What should you consider when choosing a savings account?

The color of the bank’s logo
Your goals and financial situation
The location of the bank’s branches

Budgeting And Banking Basics Final Exam

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