Savings
What is a Brokerage account?
An Account where you can invest in stocks, index funds, and bonds
Whats the difference between Principle and Interest
Principal is the amount borrowed
Interest is the extra charges that add into the principal
What is the difference between a credit card and a debit card?
A debit card pulls money directly from your own checking account, so you can only spend what you have. A credit card borrows from the issuer up to a credit limit, and you pay it back later,
Gross pay vs net pay
Gross pay is your total earnings before anything is taken out. Net pay, or take-home pay, is what actually lands in your account after taxes, FICA, insurance premiums, retirement contributions, and any other deductions. often 20-30% different
What is the APY of a savings account
real annual rate of return
Can missed loan payments affect your credit score?
Yes, missed payments can lower the credit score
What is the difference between a hard inquiry and a soft inquiry?
Soft inquiries do not affect your score (checking your own score). Hard inquiries typically stay on your report for two years but only factor into FICO scoring for one.
Fixed vs variable expenses
Fixed expenses stay the same each month: rent, car payment, insurance premiums, subscriptions. Variable expenses change with usage or choice: groceries, gas, utilities, eating out
What is the difference between simple and compound interest
Simple interest is calculated only on the principal, while compound interest is calculated on both the principal and accumulated interest, leading to exponential growth over time
What is the name of the loan used for a house
Mortgage
What is the name of the Date where a credit card company reports your balance to the credit bureaus
Statement Closing Date
401(k) employer match
Money your employer contributes to your 401(k) based on what you contribute, commonly something like 50% of your contributions up to 6% of your salary.
Can you pull money out of a Roth IRA?
Will earnings in a Roth IRA be taxed?
Yes! any initial investment can be withdrawn, only earnings cannot be withdrawn until 59.5 without penalty.
No, taxes any earning will not be taxed
What is the difference between Subsidized loans and Unsubsidized loans?
Subsidized loans are need-based and the government pays interest while you’re in school
If you pay just the minimum balance on a credit card, will you be charged interest on the rest of the balance?
Yes, you will still be charged interest
What is the 50/30/20 rule
A budgeting framework that splits after-tax income into 50% needs, 30% wants, and 20% savings and debt repayment.
What is a CD savings account?
a low-risk savings product that pays a fixed interest rate in exchange for keeping your money deposited for a set period.
What does it mean to refinance a loan, and why would someone do it?
Refinancing means taking out a new loan to pay off an existing one, replacing the old terms with new ones. People do it to get a lower interest rate.
Biggest FICO factor
Payment history, at roughly 35% of the score
What is FICA
The Federal Insurance Contributions Act tax, which funds Social Security and Medicare. Employees pay 6.2% for Social Security (up to an annual wage cap) and 1.45% for Medicare, for 7.65% total, and the employer matches that amount