What is FDIC insurance and how much do they insure for you?
Federal Deposit Insurance Corporation protects bank deposits up to $250,000
What is the 50-30-20 rule?
Spend 50% on needs, 30% on wants, and save 20%
hat is direct deposit and who is it usually between?
Electronic transfer of pay from an employer to an employee’s bank account.
What is the importance of checking your bank account regularly?
To track spending, avoid overdrafts, and catch fraud or errors.
Explain the difference between needs and wants.
Needs are essential (food, housing, utilities); wants are non-essentials (entertainment, dining out).
What does “living paycheck to paycheck” mean?
You spend nearly all your income on expenses with little or no savings leftover.
Explain short-, medium-, and long-term savings goals.
Short - 0-3 months, Medium - 3 months - 2 years, Long - 2+ years
If you use your debit card, where does that money come from?
Directly from your checking account.
What are some advantages of using online banking?
Convenience, 24/7 access, mobile deposits, transfers, bill pay.
What does FDIC insurance protect against?
Bank failure; it ensures you won’t lose your insured deposits.
When does a customer receive a bank statement?
Once a month (monthly).
What is an emergency fund and how many months of pay should it cover?
Money saved for unexpected expenses; should cover 3–6 months of expenses
What is overdraft protection and why would someone get it?
A service that covers transactions if your account doesn’t have enough money; prevents declined purchases and overdraft fees.
What happens to your money if inflation is higher than your savings account interest?
Your money loses value because it can’t keep up with rising prices.
What’s the purpose of an emergency fund?
To cover unexpected expenses like medical bills, car repairs, or job loss.
What are some fees banks may charge on a checking account, and how can you avoid them?
Overdraft fees, minimum balance fees, ATM fees, maintenance fees; avoid by keeping track of balance, choosing no-fee accounts, or using in-network ATMs.
Why should you start saving for retirement early on?
The earlier you save, the more your money grows from compound interest.
What are 2 positives of being unbanked?
No bank fees; more privacy/fewer account requirements.
When should you start saving for retirement?
As early as possible—ideally when you get your first job.
What is the risk of not saving early for retirement?
You may not have enough money later since you missed out on years of compound growth.