Banking Basics
What type of bank account is best for everyday spending and paying bills?
A checking account.
What do we call the money you earn before taxes?
Gross income
Something that shows how likely you are to repay debt.
What is a phishing scam?
A fake message trying to steal your personal or financial information.
What do we call the money you take home after taxes?
Net pay.
What do we call the money the bank pays you for keeping your money in a savings account?
Interest
What is the #1 rule of budgeting?
Spend less than you earn.
Name one factor that affects your credit score.
Payment history, amounts owed, credit age, credit mix, new credit.
True or False: Legit companies will never ask for your password or social security number through text or DM.
True
FICA taxes pay for which two government programs?
Social Security and Medicare.
What is the difference between a debit card and a credit card?
Debit cards use your money immediately; credit cards let you borrow money to repay later.
This is an example of a variable expense?
Utilities, food, clothes
What does APR stand for?
Annual Percentage Rate — the cost of borrowing money.
Name one red flag of a financial scam.
Urgency, threats, too-good-to-be-true offers, asking for gift cards, spelling errors, etc.
What is a W-4 form used for?
To tell your employer how much tax to withhold from your paycheck.
What is overdraft?
Spending more money than you have in your account, often resulting in a fee.
Rent, car payments, and insurance are examples of what type of expenses?
Fixed expenses.
What is the biggest mistake people make that lowers their credit score?
Missing or late payments
What is predatory lending?
Loans with unfair, high-interest terms designed to trap people in debt.
Name one deduction you might see on a paycheck.
Federal tax, state tax, local tax, FICA, retirement contributions, health insurance.
What is the FDIC and why does it matter?
The Federal Deposit Insurance Corporation; it protects your bank deposits up to $250,000.
An emergency fund should ideally cover how many months of living expenses?
1-2 months
What is the difference between secured and unsecured credit?
Secured credit uses collateral (like a car); unsecured credit does not.
What should you do if someone contacts you claiming you “won money” but must pay a fee to receive it?
It’s a scam — do not pay, block/report.
If your gross pay is $1,000 and your net pay is $780, how much was deducted?
$220.