Paychecks/Budgeting
What is the term for "take home pay"?
net pay
What is the highest possible credit score?
850
What type of bankruptcy allows you to keep your assets?
Chapter 13
What is the form that your employer gives you to report how much you've mad this fiscal year?
W-2
What investment is one of the best to attain your long-term investing goals?
Mutual Funds
Name a type of deduction on a paycheck
Social Security, State Income Tax, Health Insurance
Define Credit Score
A numerical representation of your financial trustworthiness, used by lenders to assess credit risk.
What are the two major ways to finance a car?
Auto Loan & Leasing
What is the form you should use at tax time if you are self employed?
Form 1099
When can you begin collecting Social Security benefits? How does age affect the amount that you are given?
You can begin taking SS payments when you turn 62 years old, but you’ll only receive 75% of your full monthly benefit
If you hold off on starting to draw from SS until you are 70, you’ll get 125% of the monthly benefit
What are three types of income?
Passive, Earned, Portfolio
Know the difference between good and bad debt.
Good debt - debt that will help you gain net worth
Bad debt- debt that works against you for unnecessary things such as credit card debt
What is the most expensive way to drive a car?
Leasing
What % should my down payment be if I want to avoid PMI?
20% or above
What is the difference between 401k and IRA?
401K - a qualified retirement savings plan that many employers offer so employees can invest money from their gross pay toward retirement. employer match
IRA - is a type of investment account designed to help individuals save for retirement with certain tax advantages.
in the 50/30/20 what is allocated to each percentage?
50 - needs
30 - wants
20 - savings
Explain the difference between APR on a credit card and on a loan
APR on a credit card includes interest
APR on a loan includes interest and other fees included in the loan
What is the best way to buy a car?
in cash
15 year fixed rate
What are the 4 types of income you may have during retirement?
Retirement Accounts and Investment Returns
Social Security
Real Estate
Inheritance
If you follow the 50/30/20 budget and receive a $1,000 bonus from work, how much of that bonus should go toward each category
wants- 300
savings- 200
Name 5 types of loans
Auto, Personal, Mortgage, Business, Student
What are the short-term and long-term effects of bankruptcy on an individual's credit score and financial future?
short term- loss of assets, drop in credit score, public record
long term - credit report impact, limited access to credit, difficult to rent or buy a home
What is the purpose of Form 1040?
To assess what your tax liability is, and if you need to pay in, or will receive a refund
Define - mutual funds, bonds, and single stocks.
Mutual Funds- A type of investment that is made up of a pool of money, collected from many investors to invest in securities such as stocks, bonds, money markets, and similar assets
Bonds- Sold by companies and governments; when you own a bond, you’re lending money to the company or government that issued it. They make regular interest payments to you and promise to pay back the face value of the bond at a specified point in the future.
Single stocks- A small piece of ownership in a company; as the value of the company goes up, it pays dividends (profit) to investors