OpenStax College Success – Chapter 10 Financial Literacy | Questions & Answers Study Guide 2026/2027

This OpenStax College Success Chapter 10: Understanding Financial Literacy resource is designed to help students build essential money management skills for college and everyday life. It covers key concepts such as budgeting, saving, financial aid, and responsible financial decision-making to support academic and personal success. This guide is ideal for students who want to improve financial awareness, reduce financial stress, and strengthen practical life skills while studying.Chapter 10, Understanding Financial Literacy Multiple Choice 1. Learning to manage your money is important because people with stronger finances: a. Are healthier & happier b. Have better marriages c. Have better cognitive functioning d. All of the above [Bloom’s: 1; Section 1] 2. Avril has created a budget for the next three months. They set a goal to save $50 each month toward an emergency fund while also reducing the amount they spend on food. The biggest obstacle is that Avril eats almost every meal out, sometimes spending more than $20 each day on takeout food. Which of the following aspects of financial planning could be most helpful to Avril? a. Develop personal goals b. Identify and evaluate alternatives c. Write down the financial plan d. Implement the plan [Bloom’s: 3; Section 1} 3. Corey wants to move into his own apartment. While looking for apartments, he finds one that slightly more expensive than he planned for. Corey’s parents suggest that he consider his goal for getting an apartment, what he needs in an apartment, what he wants to achieve financially and academically over the next year, and how this apartment will affect his achievement of his other goals. These considerations are part of the ______________ step of the financial planning process. a. Develop personal goals b. Identify and evaluate alternatives c. Write down the financial plan d. Implement the plan [Bloom’s: 2; Section 1] 4. Which of the following is NOT part of the financial planning process? a. Monitor and adjust the plan b. Write down the financial plan c. Implement the plan d. Visualize winning the lottery [Bloom’s: 1; Section 1] 5. Warren Buffett said, “Do not save what is left after spending; instead spend what is left after saving.” What do you think he meant? a. Spend what you want and save the rest b. Spend and save in equal amounts c. Save part of your money first before spending d. Spend your money before you receive it [Bloom’s: 2; Section 2] 6. A balance sheet is a map of your finances that incorporates your: a. Income and expenses b. Assets and liabilities c. Savings and income d. Purchases and payments [Bloom’s: 1; Section 2] 7. Babara is proud of himself for creating his first financial budget. He is excited to watch his savings grow while he reduces his unnecessary spending. When calculating his income, Babara expects to make bring home $180 a week by working 20 hours and making $9 an hour. When he receives his first paycheck, Babara is upset because he only made $145. What is the most likely reason for the difference between his expected income and his actual income? a. He did not consider the taxes and other deductions from his gross pay, resulting in a lower net pay. b. His manager did not pay him for all the hours he worked, resulting in fewer hours of pay. c. His manager did not pay him for the agreed upon $9 an hour and is paying him less than he should be. d. He does not even realize that his paycheck is less than expected because it was automatically deposited into his bank account. [Bloom’s: 3; Section 2] 8. Fixed expenses are to variable expenses as rent is to _____________. a. Insurance b. Utilities c. Groceries d. Predictable [Bloom’s: 2; Section 2] 9. What is an emergency fund? a. A grant that you can apply for through the financial aid office b. An unnecessary waste of money c. Money that you use to buy pizza each week d. Money set aside for unplanned expenses or financial emergencies [Bloom’s: 1; Section 3] 10. Which of the following is NOT a good use of money from your emergency fund? An expensive textbook that costs more than your