General Financial Literacy Study Guide
Exam Questions with Correct Answers
Values - Answer-Personal and based on a person's beliefs, they also influence
spending habits
SMART goals - Answer-Specific, Measurable, Attainable, Realistic, Timely
Short Term Goals - Answer-Less than one year (grades, save money for a small item)
Long Term Goals - Answer-More than one year (graduate, own a home, a career)
Financial Goal - Answer-A goal intended to assure financial security in the present and
the future
Decision Making Process - Answer-Define a problem, brainstorm solutions, consider
consequences of solutions, make a decision, evaluate later
Economics - Answer-Social science study of how people use their limited resources in
satisfaction of their limitless wants
Scarcity - Answer-An economic principle stating that because of limited resources, an
economic system cannot possible produce all the goods and services that people want,
then choices must be made on how the limited resources will be used
Opportunity Cost - Answer-The value of what is given up when a person chooses one
option over another
Cost Analysis - Answer-How much something costs
Cost Benefit Analysis - Answer-How much benefits outweigh the costs
Need - Answer-The essentials or basics of life
Want - Answer-Items, activities, or services that increase the quality of life
Researching a career increases knowledge of educational requirements - Answer-
Career Plan - Answer-Occupational Goal, human capital, skill development, future
income depends mainly on education
Source of Income - Answer-Wages, investments, self-employment
Employee Benefits - Answer-Insurance, leave, retirement, tuition reimbursement
, Cost of Living - Answer-Housing costs, transportation expenses, food, utilities
Return on Investment (ROI) - Answer-A measure of an investment's worth
Entrepreneurship - Answer-The capacity/willingness to develop, organize and manage a
business venture along with any of its risk in order to make a profit
Risk - Answer-Financial failure, time-commitment, stress, less time with family,
unpredictable income
Reward - Answer-Be your own boss, take advantage of business opportunity, introduce
new ideas, better use of skills and knowledge, more creativity and control
FAFSA - Answer-Free Application for Federal Student Aid
Types of Financial Aid - Answer-Scholarships, Loans, Pell grants
FAFSA4Caster - Answer-Estimate of a person's eligibility for federal student aid
Gross - Answer-Income before taxes
Net - Answer-Income after taxes (take home pay)
Types of Taxes - Answer-Federal, state, social security and medicare
FICA - Answer-Federal Insurance Contributions Act
Social Security and Medicare - Answer-Monthly income and federal health insurance for
retired workers and the disabled
I-9 - Answer-Verification form for legal work (social security card, driver's license)
W-2 - Answer-Tax form you receive from your employer that lists your earnings fro the
previous year and all withholdings. YOU need this form to fill out your taxes.
W-4 - Answer-Tax form you fill out for your employer to determine the amount of taxes
taken out of your paycheck
Steps to Making a Budget - Answer-Evaluate goals, determine take home pay, how to
handle money, make adjustments, use budget
Budget - Answer-Itemized forcat of income and expense expected for some period of
time in the future
Fixed Expenses - Answer-Doesn't change over time (car or mortgage payment)
