Name:___________________________________________Period:___________Date:_______________
Money Management Test
True/False: Write “True” if the statement is correct. Write “False” if all or part of
the statement is incorrect. (2 points each)
____1. The budgeting process starts with monitoring current spending.
____2. Most short-term goals are based on activities over the next two to three years.
____3. A common long-term goal may involve parents starting a college fund for a new born.
____4. Rent is considered a fixed expense.
____5. Flexible expenses stay about the same each month.
____6. A pawnshop offers loans to people starting their own business.
____7. Opening a checking account requires completing a signature card.
____8. A blank endorsement allows anyone to cash a check.
____9. A “smart card” stores a person’s bank balance right on the plastic card.
___10. An outstanding check refers to one written on an account with a very low balance.
___11. An advantage of using credit is impulse buying.
___12. Capital refers to a person’s assets.
___13. A steady employment record helps a person’s credit history.
___14. Installment credit usually allows a person to make additional purchases on the account.
___15. Using the 20-10 rule, a person making $30,000 a year after taxes should have no more
than $8,000 or outstanding debt.
Multiple Choice: Choose the most correct answer for each. (4 points each)
___16. The final phase of the budgeting process is to:
a. Set personal and financial goals
b. Review financial progress
c. Compare your budget to what you have actually spent
d. Monitor current spending.
Name:___________________________________________Period:___________Date:_______________
___17. An example of a long-term goal would be:
a. Saving for retirement
b. An annual vacation
c. Buying a used car
d. Completing college within the next six months
___18. A clearly written financial goal would be:
a. “To save money for college for the next five years.”
b. “To pay off credit card bills in 12 months.”
c. “To establish an emergency fund of $4,000 in 18 months.”
d. “To invest in an international mutual fund for retirement.”
___19. An example of fixed expense is:
a. Auto Insurance
b. Clothing
c. An electric bill
d. Educational Expenses
___20. ________ is commonly considered a flexible expense.
a. Rent
b. A mortgage payment
c. Entertainment
d. Home Insurance
___21. The highest loan rates usually occur when borrowing from a:
a. Bank
b. Pawnshop
c. Credit-Card company
d. Credit Union
___22. A ____________ is used to add funds to a bank account.
a. Deposit Slip
b. Check
c. Signature Card
d. Withdrawal Slip
___23. Obtaining cash form an ATM is similar to:
a. Earning Interest on your account
b. Making a Deposit
c. Opening a new account
d. Writing a Check
Name:___________________________________________Period:___________Date:_______________
___24. A service charge on your bank statement will result in:
a. A lower balance
b. A higher balance
c. Earning more interest
d. More outstanding checks
___25. A common advantage of using credit is:
a. Less impulse buying
b. Ability to obtain items now
c. Lower cost for items purchased
d. Lower chance of overspending
___26. A person’s regular income is referred to as:
a. Character
b. Capital
c. Capacity
d. Collateral
___27. To build credit history, a person could:
a. Request to view his/her credit file
b. File his/her federal income taxes on time
c. Use an ATM several times a month
d. Establish a steady employment record.
___28. Utility companies and medical service organizations commonly offer __________ credit.
a. Single-payment
b. Revolving
c. Installment
d. Retail
___29. Using the 20-10 rule, a person earning $1,500 a month should not have monthly credit
payments that exceed:
a. $30
b. $150
c. $20
d. $300
___30. When using a credit card:
a. You spend money you have
b. You add money to your account
c. You spend money you don’t have at that time
d. You withdraw money from your savings account