Which of the following is FALSE about opening up a Roth IRA? (hint: choose 2 correct answers)

You need to put at least $1,000 in it every year

Compounding occurs at a slower rate in a Roth IRA

A person of any age with earned income can open one

It can help teens start saving for retirement early

What is a reason for why so many Americans live paycheck-to-paycheck?

Many people are paying themselves first and then spending

Many people only buy what they NEED, not what they WANT

Many people spend within their budget

What is a benefit of opening up a Health Savings Account (HSA)?

You can use pre-tax $ to pay for out-of-pocket costs

The funds expire only every 5 years

You earn interest, but it's taxed

You can use the funds for retirement once you're 75

How does the 50-20-30 rule distribute your income?

50% expenses, 20% saving, 30% flexible spending

50% expenses, 20% flexible spending, 30% saving

50% flexible spending, 20% saving, 30% expenses

50% saving, 20% flexible spending, 30% expenses

How is compound interest different than simple interest?

It is simple interest + interest earned on that interest

It is simple interest - interest earned on that interest

It is double the simple interest earned on an investment

It's not different; they are one and the same

Which is TRUE about online saving accounts? (hint: choose 2 correct answers)

They usually have lower costs compared to brick-and-mortar banks

Usually have higher interest rates than non-online accounts

Online accounts are not FDIC insured

You can withdraw money an unlimited # of times

Saving accounts differ from checking accounts in that...

Money in a saving account can be used to fund a bank's loans

Saving accounts let you withdraw $ an unlimited # of times

Saving accounts come with more fees than checking accounts

Checking accounts offer higher interest rates

What might you need to open a savings account? (hint: choose 2 correct answers)

Your previous year's tax returns (or your parents')

The routing number to a checking account

How does inflation impact the money in your savings account?

The purchasing power of your money decreases over time

Inflation decreases only the $ you earn in interest

Inflation increases the value of the money in your account

Inflation has no impact on $ in your savings account.

Which is TRUE about Certificates of Deposit (CDs)? (hint: choose 2 correct answers)

The bank can loan out the $ in your CD

The bank pays you interest in return

You agree to keep $ in a CD for an undetermined period of time

You pay the bank some interest to keep $ in the CD

Saving

Authored by Next Gen Personal Finance undefined

Life Skills

9th - 12th Grade

CCSS covered

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MULTIPLE CHOICE QUESTION

20 sec • 1 pt

How is wealth defined?

How much money you have in your Checking and Saving accounts

Debts - Assets

All assets, including money in the bank + retirment

Assets - Debts

MULTIPLE SELECT QUESTION

30 sec • 1 pt

Which of the following is FALSE about saving and investing? (hint: choose 2 correct answers)

Saving doesn't outpace inflation; investing usually does

Both saving and investing generally have low returns

Saving is for short-term; investing is for the long-term

Saving has more risk; investing has less risk

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which is NOT a typical goal for a savings account?

To create an emergency fund

To pay for higher education

To save for a new car

To buy groceries for this week

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

What is a general rule of thumb on how much you should save?

5% of your income

10% of your income

20% of your income

30% of your income

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

What is a 529 account?

A type of retirement account for teens & younger adults

A special type of saving account for minors

A tax exempt fund that lets your savings grow for school

A special type of saving account for college students only

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

About how much should you save in an emergency fund?

1-3 months of living expenses

3-6 months of living expenses

6-9 months of living expenses

9-12 months of living expenses

What is a good strategy to help you save?

1st, spend money on all expenses; put the rest into saving

Tap into your savings on a regular basis to purchase small items, like snacks

Pay yourself first - set aside money for savings each month

Keep your spending and saving money together in 1 account

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