Personal Finance 1
What does APR stand for in the context of financial transactions?
Annual Percentage Rate (APR)
What does ATM stand for in the context of a way to access cash?
Automated Teller Machine (ATM)
Which federal agency provides deposit insurance coverage for banks?
Federal Deposit Insurance Corporation (FDIC)
What are dollar bills made out of?
Linen and cotton
What product protects you from the risk of financial ruin after a negative event?
Insurance Policy
A wage and tax statement, annually provided by an employer
W-2
Tax Day (the last day to file your taxes) is normally on this date in April unless it falls on a holiday or weekend.
April 15th
A ________ represents a share in the ownership of a company
Stock
What is the typical range of possible FICO credit scores?
300 - 850
How much does it cost to file the FAFSA?
$0.00
It's free!
How often must the FAFSA be completed?
Yearly
Which formula is used to determine the net worth of an individual or household?
Assets - Liabilities = Net Worth
An individuals total earnings BEFORE taxes and deducations is called
Gross Pay
An individuals total earnings AFTER taxes and deducations is called
Net Pay
What does FAFSA stand for?
Free Application for Federal Student Aid
In the U.S., money is printed by the __________ of the federal government.
Department of the Treasury
What is an instrument used by the government or corporations to raise money by borrowing from investors?
Bonds
Who tracks all of your credit information?
Credit reporting agencies (Equifax, Experian and TransUnion)
A unique 9 digit number for each individual, used to track government benefits and for other identification purposes
Social Security Number
You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?
Your checking account.
Gordon worked a part-time job last year. It’s now January and he’s preparing to file his taxes. Briefly explain what he needs to do -- and when -- in order to file his taxes.
Wait for his employer to send him a Form W-2, by January 31st. Once he has his W-2, he can use the information to complete his tax return, either by filing electronically through tax software or by mailing a paper form to the IRS before the tax deadline, typically April 15th
Checking and savings are two commonly used bank accounts. Describe one difference between them and one scenario in which you should choose to use a checking account over a savings account.
A key difference between a checking and savings account is that a checking account is designed for everyday transactions and spending, while a savings account is meant to store money for future goals and typically earns interest, making a checking account the better choice when you need to access funds quickly for regular expenses like paying bills or buying groceries
Pretend you make $750 worth of purchases on your credit card, your bill arrives saying your minimum payment due is $25 and you pay $150 before the due date. Describe how credit card interest works and what you can expect to happen next.
If you make $750 in purchases on your credit card and only pay the minimum payment of $25, the remaining balance of $725 will accrue interest charges based on your credit card's annual percentage rate (APR), meaning you'll essentially be paying interest on that remaining balance until it's fully paid off; by paying $150 before the due date, you'll only be charged interest on the remaining $575 balance, which will be calculated daily based on your APR, and added to your next billing cycle.
You’ve picked out a new phone and are finally ready to get your own cell phone plan! But first, the salesperson says they need to check your credit report. Explain why a cell phone service provider would want to see your credit report.
A credit report shows your credit history, including any late or missed payments. Since getting your own cell phone plan means you’re entering into an agreement where you’ll be expected to make timely monthly payments, they’ll want to make sure you’re not at risk of failing to pay your bill.
Name 3 common budgeting strategies
Envelope budgeting
50/30/20 budgeting
Zero-based budgeting