Review 1
What is the primary purpose of creating a personal budget?
To manage income and expenses
Which government agency is responsible for collecting federal income taxes in the US?
Internal Revenue Service (IRS)
What is the purpose of a W-2 form?
Taxes
What is the main purpose of a savings account?
Building up earned income
Which document do you use to track monthly spending?
Budget worksheet
Which of the following is considered a fixed expense?
Groceries
Entertainment
Monthly Rent
Clothing
Monthly Rent
What is the main advantage of using a checking account over cash?
Provides a record of transactions
What is the main purpose of a 1040 tax form?
annual income/taxes
What is a consequence of not paying your bills on time?
Lower credit score
Which type of tax is taken directly from your paycheck?
Income tax/payroll tax
What is the difference between gross income and net income?
Gross is the total, Net is how much you take home
Name one common method for building a good credit score.
Paying Bills on time, every time.
What is the main reason to review your credit report regularly?
To check for errors or fraud
Name one risk of using payday loans.
The interest is so high that it is hard to pay off.
What is a variable expense?
Something that is not fixed, such as, entertainment, groceries, gas
What is the main purpose of a credit card?
To borrow money for purchases
Name one benefit of direct deposit.
Immediate, prevents loss, etc...
Name one type of deduction commonly found on a paycheck.
Health Insurrance
What is the main purpose of a financial plan?
To set and achieve financial goals
Describe inflation?
An increase in the overall price level of goods and services over time
What is an emergency fund?
Which document summarizes your financial activity over a period?
Bank statement
What is an example of a financial goal?
Saving for college, putting money into a HYS account, etc....
What are the 3 types of economies?
Mixed
Market
Command
What happens to the equilibrium price and quantity in a market when demand increases while supply remains constant?
Price increases and quantity increases