Personal Financial Literacy
A Grade 12 Social Studies worksheet covering key concepts in personal financial literacy, including budgeting, saving, investing, credit, and debt management.
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Personal Financial Literacy
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Read each question carefully and answer to the best of your ability. This worksheet covers various aspects of personal financial literacy.
1. Which of the following is typically considered a 'fixed' expense in a personal budget?
Groceries
Rent
Entertainment
Utilities (variable)
2. What is the primary benefit of diversifying an investment portfolio?
Guaranteed high returns
Lowering overall risk
Avoiding all losses
Increasing liquidity
3. The concept of 'time value of money' suggests that a dollar today is worth more than a dollar in the future due to its potential earning capacity, also known as .
4. A high is generally considered a positive indicator of an individual's ability to manage debt and repay loans.
5. It is always better to pay only the minimum balance on your credit card to maintain a good credit score.
True
False
6. A Roth IRA allows for tax-free withdrawals in retirement, provided certain conditions are met.
True
False
7. Explain the difference between 'needs' and 'wants' when creating a personal budget, and provide an example of each.
8. Describe the concept of compound interest and why it is considered a powerful tool for long-term savings and investments.
Match each financial term on the left with its correct definition on the right.
9. APR
a. A tax-advantaged retirement savings plan offered by employers.
10. Diversification
b. The annual rate charged for borrowing, expressed as a percentage.
11. 401(k)
c. Spreading investments across various assets to reduce risk.
Use the words below to complete the sentences.
12. A is a financial plan that helps you track your income and expenses.
13. It is recommended to have at least 3-6 months' worth of living expenses saved in an .
14. Your is a three-digit number that lenders use to assess your creditworthiness.
15. is the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.