General Terms
What is the money you intentionally set aside instead of spending called?
Savings
Frue or Talse: Needs and wants are exactly the same for everyone.
Talse
Frue or Talse: Credit Cards are directly tied to and take money straight from your bank account.
Talse
If you spend $4 on coffee everyday, how much money would you have spent on coffee in a year?
$1460
The amount of money spent that generally stays the same from month to month. (ex. utilities, bills, rent)
Fixed Expenses
Before making a purchase, what things should you consider?
Wants vs needs
cost
Unforeseen times of turmoil that costs you money.
Unexpected expenses
You have $500 in an emergency fund. You have a $200 unexpected expense.
You decide to replenish the $200 by saving $50/month.
How many months will it take?
4 months
The cost of borrowing money or the reward for saving and investing it.
Interest
Which is generally a better financial goal?
A. "I want to buy a car."
B. "I will save $50 every month for six months."
B
An unplanned purchase made without significant consideration.
Impulse Purchase
You have $300 in savings and receive an unexpected $500 bill.
You can either:
A: Put the entire $500 on a credit card
B: Use $300 savings and put $200 on the credit card
C: Ignore the bill
Which option generally minimizes how much you borrow?
B
What is the term for money you receive from a job after taxes and deductions?
Take-home pay/ Net income
What is the financial term for choosing between competing uses of your limited money?
Opportunity cost
What happens if you consistently spend more money than you can afford to repay on a credit card?
You can accumulate debt and interest.
You have two options:
Option A: $900 laptop paid upfront
Option B: $80/month for 12 months
Which option costs more overall?
Option B — $960 total, or $60 more.
Money set aside for unforeseen times of turmoil.
Emergency savings
You have $100 extra at the end of the month. Give three different things you could do with it that would improve your financial situation.
Save it, put it toward debt, add it to an emergency fund, or put it toward a financial goal.
You have a $500 credit card balance and your interest rate is high. Why might making only minimum payments be problematic?
It can take much longer to pay off the balance and cost more in interest.