FIRST PAYCHECK AND BUDGETING
When you get your first paycheck, why is your take-home pay usually less than your hourly wage times hours worked?
Taxes and other deductions are withheld.
What type of bank account is usually used for everyday spending?
Checking account.
What is a financial goal?
Something specific you are saving or planning money for.
What does it mean to borrow money?
You use someone else’s money now and agree to repay it later.
What is a stock?
Ownership in a company.
What is the difference between gross pay and net pay?
Gross pay is before deductions; net pay is what you actually take home.
What type of bank account is usually used to store money for future use?
Savings account.
Name one short-term savings goal a teenager might have.
Car, phone, trip, college expenses, emergency fund, laptop.
What is interest on a loan?
The cost of borrowing money.
What is a bond?
A loan to a company or government that pays interest.
Give two examples of “needs” and two examples of “wants.”
Needs: food, housing, transportation, insurance. Wants: entertainment, eating out, new clothes, subscriptions.
What is a debit card connected to?
Money in your bank account.
Why is it helpful to separate savings from spending money?
It makes it less tempting to spend the money.
Why can credit card debt become expensive?
Credit cards often charge high interest if the balance is not paid in full.
What is a mutual fund or ETF?
A basket of investments, such as stocks or bonds.
What does it mean to “pay yourself first”?
Save money before spending on extras.
What is the risk of overdrawing your checking account?
Fees, declined transactions, or a negative balance.
What is an emergency fund?
Money set aside for unexpected expenses.
What does making only the minimum payment usually do?
It keeps the debt around longer and may increase total interest paid.
Why do investments go up and down in value?
market conditions, company performance, interest rates, economic news, and investor behavior.
You earn $300 from a summer job. You want to save 20%. How much should you save?
$60.
Why should you review your bank transactions regularly?
To catch mistakes, fraud, overspending, or forgotten subscriptions.
You want to save $600 in 6 months. How much do you need to save each month?
$100 per month.
What is one habit that helps build good credit?
paying bills on time.
What is the difference between saving and investing?
Saving is usually safer and short-term; investing is for growth over time but includes risk.