EverFi Financial Literacy Practice Test

These questions are part of the practice quiz. Start practicing

• When should one apply for the Free Application for Federal Student Aid (FAFSA)?
• What is the main difference between fixed and variable interest rates?
• Which of the following describes variable expenses?
• Which type of review is more reliable?
• What is the primary difference between a checking account and a savings account?
• What is a key benefit of using a checking account?
• Which statement best describes the significance of diversification in a portfolio?
• Which of the following is a benefit of a high credit score?
• What is the effect of using credit cards irresponsibly?
• What does the $500 Anthony had to pay before filing a claim refer to in his insurance policy?
• What is the purpose of financial literacy?
• What type of predatory loan offer did Emery experience, indicated by extra fees not impacting her loan balance?
• What is the typical purpose of a savings account?
• What role do tracking and categorizing expenses play in financial management?
• Which bottle of lotion is the better deal based on price per unit?
• Which aspect is crucial to evaluate when determining the value of a degree?
• What is a traditional IRA?
• Why is it important to maintain a good credit score?
• What is the purpose of filling out a W-4 form when starting a new job?
• If Kai wants a gig job and lacks transportation, what position could be a good fit?
• What is the purpose of obtaining a credit card?
• What is a stock?
• What are assets?
• What can be a disadvantage of not having homeowner's insurance?
• What is renter's insurance?
• How does inflation typically affect purchasing power?
• What is a good strategy to make informed purchase decisions?
• Why is it important to be an informed consumer?
• How likely is it that Carol will have a positive return on investment based on her educational path?
• What is an emergency fund, and how much should you ideally have?
• How is money divided using the 50-30-20 Method?
• What defines a financial statement?
• What is one primary advantage of a savings account?
• Why is having a will considered important?
• Why is it beneficial to fill out the FAFSA every year?
• Which of the following statements is true about checks?
• What does an interest rate indicate?
• Which of the following is typically NOT a workplace benefit?
• Why is it important to have a diversified income stream?
• What are the benefits of having a strong credit score?
• What is a common misconception about homeowner's insurance coverage?
• What is one significant advantage of gig employment?
• Which savings option would be most suitable for someone like Keira, who is new to saving and has limited funds?
• When considering educational investments, students should focus on which of the following?
• To maximize savings, what characteristic is important for a financial account?
• What is the primary function of a 401(k) plan?
• Which of the following is an example of a need?
• Which money management strategy does Jasmine implement by categorizing her spending?
• How can students effectively manage student loan debt?
• What does diversification in investing help to achieve?
• What action can you take to make a smart purchase?
• What does it mean when the money in your 401(k) is vested?
• What type of account did Sawyer open, which requires a large initial deposit but offers high interest and easy access?
• What is a common resource schools provide to help students find scholarships?
• What main purpose does a loan serve for a consumer?
• What is a common feature of a checking account?
• Which of the following describes needs?
• What distinguishes secured loans from unsecured loans?
• How does credit scoring affect loan applications?
• What does the term "investing" refer to?
• What is the main purpose of insurance?
• How can a savings account assist Louie in managing his money?
• What is a credit report?
• Which factor is important to consider for obtaining a positive return on investment for higher education?
• How can Camilla effectively manage her finances with her new checking account?
• What is withholding tax?
• What comprises the total cost of attending a university?
• Why is it important for individuals to set both short-term and long-term financial goals?
• Which of the following is a potential risk involved in investing?
• Why is monitoring financial performance important?
• What does liquidity refer to in a financial context?
• What type of loan did Frank experience when offered a high-interest loan that needs to be paid back quickly?
• Why is it important to regularly review your bank statements?
• What is a recommended method to build an emergency fund?
• What should you consider regarding insurance premiums?
• Why might a student prefer federal loans over private loans?
• How can Alejandro make a payment if he forgot his wallet but has his smartphone?
• Which type of financial aid is classified as "free money"?
• What factor can enhance your competitiveness in the job market?
• Which of the following best describes the role of a financial advisor?
• What is one potential outcome of filing a claim with homeowner's insurance?
• What is the significance of a financial forecast?
• What type of insurance may employers offer when you start employment?
• How can budget tracking apps improve financial management?
• What is a reliable source to search for scholarship opportunities?
• What would happen if your car were stolen and you didn't have auto insurance?
• What is a bond?
• What is the main purpose of having auto insurance?
• What is a significant advantage of taking out a federal student loan over a private loan?
• What should be included in the “wants” category of a budget?
• What should be considered when creating a budget?
• What is the purpose of estate planning?
• When gifting money via check, what is a significant advantage?
• What role does the Federal Reserve play in the economy?
• Health insurance, paid time off, and retirement plans are all examples of what?
• What is the purpose of setting a financial goal?
• What does participating in gig work often provide individuals regarding their employment?
• What does a budget help you do?
• What is a savings bond?
• What is a possible financial risk of not having homeowner's insurance?
• What factors should be considered when investing in real estate?
• Why might a young professional like Zack need insurance protections absent in traditional employment?
• What does the amount of $1,840 represent for Amla's earnings?
• How can having short-term disability insurance benefit a freelancer during a work interruption?
• What does APR stand for, and why is it important?
• Which document is required to fill out the FAFSA?
• What is one advantage of online banking?
• What money management strategy should someone who deals in cash use to physically manage their cash?
• For a young adult, what could be a prioritized factor in choosing a financial account?
• If your earnings potential exceeds the cost of higher education, what is the resulting financial status?
• What is identity theft?
• Why is it important to distinguish between needs and wants during budgeting?
• What is a personal loan?
• What should be prioritized when creating a budget?
• In the 50-30-20 rule, 50% of your income should be spent on which category?
• What should you do if you are struggling with debt?
• Aisha is considering two loans: a 3-year loan at 8% and a 5-year loan at 6%. Which does she likely prefer?
• What is the primary purpose of retirement planning?
• What does "living within your means" emphasize?
• What is a benefit of using credit cards for purchases?
• How can one enhance their financial literacy?
• What characterizes a skilled consumer?
• What is often a requirement for scholarships related to specific fields of study?
• How often should you review your budget?
• How do loan terms generally affect the cost of credit?
• If a homeowner’s claim is approved after damage, what is typically required of them?
• When selecting an insurance policy, which factor is important to consider?
• What action is typically unnecessary for using a mobile banking app?
• What is one major factor that can enhance the reliability of an online review?
• What can consumers do to avoid being misled by fake reviews?
• Which of the following is a common risk associated with predatory loans?
• What is one primary reason to invest in stocks?
• Jobs that require degrees or certificates typically pay ___________ compared to those that require little or no training.
• What does short-term disability insurance generally cover for someone who cannot work?
• What is a net worth statement?
• Overdraft protection helps cover a purchase in your checking account when...
• What type of job can be categorized as gig work?
• What is the primary purpose of overdraft protection?
• Using a mobile banking app, you can...
• A positive return on investment for education occurs when what condition is met?
• What is a primary benefit of using a financial advisor?
• To deposit a check using a mobile banking app, what must you do?
• Which of the following scenarios would justify using short-term disability insurance?
• What does it mean to have a diversified investment portfolio?
• What benefit does homeowner's insurance provide in the event of damage such as from a hurricane?
• Why is using a debit card beneficial?
• When considering which loan to take, which factor is least important?
• Which of the following is another example of a workplace benefit?
• What is a financial literacy program designed to do?
• Why is it important for freelancers like Zack to consider short-term disability insurance?
• Why was Josh's paycheck only $1,100 when he earned $1,900 for two weeks of work?
• What is the primary purpose of tracking spending in a budget?
• What advantage does depositing checks via mobile banking offer?
• What is compound interest?
• Which budgeting method emphasizes dividing your income into specific categories?
• Which of the following is a main purpose of homeowner’s insurance?
• What happens to purchasing power during inflation?
• Which review is more trustworthy for an online clothing store?
• What is one potential outcome of accepting a loan with hidden fees?
• What type of car insurance is required if you accidentally damage part of your neighbor's house?
• What are the key components of a financial plan?
• What is a significant downside of taking high-interest loans?
• What does a mortgage specifically finance?
• Which of the following best describes fixed expenses?
• What does "pay yourself first" mean?
• Why might someone be hesitant to use cash for large purchases?
• Which of these expenses would be considered an emergency?
• How can a budget assist in achieving financial goals?
• What is the main benefit of having a clear financial goal?
• What is the primary goal of consumer protection laws?
• What is a significant risk of using cash for purchases?
• How can taking out a loan assist Margo in purchasing a new car?
• What type of loan does Elliott have if he must sign over the title to his car as collateral?
• What is the purpose of a 529 plan?
• How can setting financial goals affect personal spending habits?
• What is one of the roles of the Federal Reserve?
• What is one benefit of having a savings account?
• What type of risks does short-term disability insurance typically protect against?
• Which of the following is an advantage of having a budget?
• For someone who works from home, which of the following is considered a want?
• What type of scholarship might Marcus be eligible for given his interest in law?
• Why do financial institutions provide higher interest rates for Certificates of Deposit (CDs)?
• What is a defining feature of a debit card?
• What should homeowners expect after filing a claim for roof damage?
• How should Carlos categorize paying his insurance when using the 50-30-20 method?
• What is a budget?
• What are recurring expenses?
• What distinguishes a credit card from a debit card?
• When comparing purchases, why is it important to consider unit prices?
• What savings feature is most beneficial for someone wanting easy access to their money during emergencies?
• What is typically true about a traditional IRA?