Checking Accounts
What are checking accounts used for?
Monetary daily use.
Allows you to easily deposit, spend, or withdraw money.
What is a savings account?
An interest bearing financial account.
What is the 50/30/20 method?
50%: Needs.
30%: Wants.
20%: Savings.
What is the payment we receive for working called?
Income.
What is gross pay?
Your pay before deductions.
How much money will the government insure in a bank?
Up to $250,000.
What are the main differences between a checking and savings account?
A checking account doesn't earn interest, while a savings account does earn interest.
What is the Envelope Based Method?
When you divide your money into individual envelopes and only use each envelope for that category.
What is the word for a bill we have to pay?
Expenses.
What is net pay?
Your pay after deductions.
Name at least 2 benefits of having a checking account?
Debit cards, ATMs, Direct Deposit, online bill pay, checks, easier to track your budget.
What are some important features when you are choosing a savings account?
Availability, fees or no fees, interest rate.
What is the Zero-Based Method?
When every dollar is accounted for and your budget equals zero at the end of the month.
What is the difference between a fixed and variable expense?
Fixed stays the same, like your rent.
Variable changes like your electricity bill.
Give two examples of deduction you might see on a paycheck.
Social Security tax, Medicare tax, Federal/State Tax, health insurance, retirement, life insurance, etc.
What happens if I take out more money than I have in my account?
You have over-drafted your account and may be subject to over-draft fees.
It is recommended to use a savings account to store and grow your __________ _____.
Emergency Fund
How much should save for your emergency fund.
Either 3-6 months worth of expenses or 3-6 months of income.
What is a commission?
A % of a good/service sold that you receive, as a salesperson, for selling the good/service.
What is the difference between Y-T-D and current?
Current is the pay period, Y-T-D is the entire year up to that point.
What do you usually need to open a checking account?
A valid I.D., a social security number/taxpayer I.D., proof of address, personal info like phone number/email, and an initial deposit.
Can bank ands credit unions change their rates at any time and why or why not?
Yes because the rates they choose are based off of the Federal Rate and that changes based off of whatever rate the government has currently set.
Name a scenario in which you should use your emergency fund and explain how you will build it back up after you use it.
Answers may/will vary. Points will be given at my discretion.
Why do we pay taxes?
To fund schools, firefighters, roadwork, public transport, the government, etc.
Calculate: Your pay period is a 40 hour work week. If you earn $20/hour and 25% of your pay is deducted, how much is your take-home pay per period?
Deductions: 800 * 25% = $200
Takehome = Gross - Deduction
Takehome = $600