Personal Financial Literacy Quiz

Personal Financial Literacy Concepts

• Wages: Randy earns $22 per hour, illustrating the concept of wages in employment income.
• Credit Score: Represents the risk a lender takes on a borrower, typically a numerical value affecting borrowing terms.
• Incorrect Check: Phil Reagan’s $152.65 check to USA Electronics is noted as filled out incorrectly.
• Account Types: A checking account allows deposits and withdrawals while providing easy access to funds.
• Employee Payment: Employees are often compensated through wages.
• Budgeting Large Expenses: Should be divided equally across all paychecks to manage cash flow effectively.
• Secured Loans: These loans are backed by collateral, providing security to lenders.
• Secured Credit Card: Recommended for individuals like Jimmy with poor credit to help rebuild their credit score.
• Total Debt: An individual may owe a total debt amounting to $20,475.
• Consumer Credit: Helps lenders assess how much to charge borrowers for loans.
• Wants vs. Needs: A “want” is defined as something desirable to have but not essential.
• Certificate of Deposit (CD): Allows investment of funds at a set interest rate for a predetermined duration.
• Debt-to-Income Ratio: Important factor for lenders when evaluating loan applications.
• Types of Income: Wages, salary, and commission types of income are categorized as earned income.
• Commission: James earns 10% from every sale, exemplifying commission-based income.
• Use of Credit: Enables immediate purchase with delayed payment.
• Interest Rate: The cost incurred for borrowing money, charged by lenders.
• Portfolio Income: Gained by selling investments at a profit.
• Account Status: Account can be labeled as potentially negative but closed.
• Principal: Refers to the non-interest portion of a loan amount.
• Productivity: The ability to generate and deliver goods and services effectively.
• Credit Accounts: Individual may have a total of 10 credit accounts.
• Cultural Influence on Spending: Family, friends, and cultural contexts significantly impact spending behavior.
• Portfolio Income and Real Estate: Lillian’s house sale scenario does not qualify as portfolio income despite the profit.
• Certificate of Deposit Duration: Typically ranges from a few months to several years.
• Factors Influencing Earned Income: Education, training, and experience are crucial determinants of earned income potential.
• Passive Income: Income generated from assets that typically recurs without active involvement.
• Deceptive Marketing: Misleading product images fall under deceptive descriptions in advertising.
• Budget Allocation: Graph analysis often shows housing as the largest budget item.
• Work Hours: Employees commonly work 80 hours during a standard pay period.
• Interest Definition: This is the cost of borrowing money, represented by a specific rate.
• Vacation Hours Used: An employee may use 18 hours of vacation within a pay period.
• Opportunity Cost: If Meredith chooses to buy a laptop instead of going to the Bahamas, her opportunity cost is the vacation.
• Earning Potential: The maximum salary a person can achieve in their career or job role.
• Credit Card Definition: A bank-issued card that enables purchasing goods and services on credit.
• Late Payments: An individual may have six payments that were late by at least 30 days.
• Access to Funds: A checking account provides convenient access and facilitates the use of checks and debit cards.

Test your knowledge on personal financial literacy with these flashcards. From understanding wages to credit scores and checks, this quiz covers vital financial concepts to enhance your financial skills.