Building blocks
What is the foundation and the 3 pillars of a strong financial house?
God
Self, Others, Finances
Is a new pair of shoes a want or a need?
Both
Want- Jordans
Need- new shoes for work
What should you check every year to ensure it is accurate?
Credit report
What is the difference between a credit and debit card?
Debit card takes money out of your account at time of purchase. Spending money you already have.
Credit card records all purchases during statement period and has one bill at the end that must be paid. It is like a loan in that money is borrowed.
What are some ways to protect your bank info?
Don't put debit card info on sketchy internet websites.
Don't write your pin number on a card and keep it in your wallet.
Don't cash unknown checks that come in the mail.
Be on guard for scam emails
What is an asset?
Something that God has entrusted to you that has value.
What are the 3 ways of living, and which one is the goal?
Below your means
At your means
Above your means
What are the benefits of using/ building good credit?
Lower interest rates, travel or rental car benefits, cash back rewards. Acceptance into apartments and other lines of credit.
What are some fees that banks charge?
Overdraft fee
Monthly maintenance/service fee
Insufficient fund fee
Excessive transactions fee
What amount should you aim for in a long term emergency fund, and why?
3 months of required expenses.
Can take 3 months to get a new job.
What are the 3 types of assets and an example of each?
Physical (car, land, furniture etc)
Human (Education, training or abilities)
Financial (Money in the bank, retirement fund)
If your current expenses are more than what you make, what are two ways to solve that problem?
1) Get additional income
2) Cut back on non essential expenses
If you don't use credit well, what are the disadvantages?
Interest charges- paying more than purchase price.
If not used well- can create big debt.
Higher loan rates
May not get approved for future lines of credit- apartment, cell phone etc.
What documents are needed to open a bank account?
State ID or passport
Social Security Card
Proof of address
What are the 3 steps to protect against emergencies?
1. Short term savings fund
2. Pay off debt to increase income
3. Establish a long term emergency fund
What is an internal obstacle and an example of one?
Something that you can control (inside of you).
Ex. Getting a new phone, Uber eats
What is a SMART financial goal?
Specific, Measurable/made to honor God, Accountable, realistic, and time bound.
What is good debt to have?
What is bad debt?
Good debt- home loan, small business loan, school loan.
Bad debt- everything else :)
What are some questions to look at before opening a bank account?
How much money do you need to open it?
What is the minimum balance you must maintain?
What are the fees?
How long does it take for transferred fund to be deposited?
What 3 types of insurance should you have?
What should you not have?
3: Renters/Home, Car and Health
Not: Life Insurance
What is an external obstacle and an example of one?
External is something outside of your control.
Ex: Health issue, car accident, emergency home repair.
What are 3 tips for being thrifty?
Examples: Coupons, thrift shops, bringing your lunch to work instead of eating out, research lower utility costs, buy clothes in the off season.
What does appreciation mean and what is something that appreciates in value?
What does depreciation mean and what is something that depreciates in value?
Appreciation- the value goes up over time. Typically a house, education etc.
Depreciation- the value decreases over time. A car, appliances, technology, furniture.
What are two places we see interest rates? How does it work?
Interest rates are in percentages and is the price you pay to borrow money. Interest compounds over time meaning it adds to itself like a snowball. You pay more and more interest over time if the loan goes unpaid.
It is also money given in a savings account based on what you have in the bank. Its basically free money for having a savings!
What are the two types of car insurance and what are the differences?
Bonus: What is a deductible and premium? What is the correlation between them?
Liability- If you are at fault, only covers the other persons car and expenses. It is required.
Collision- If you are at fault, covers your car and the other person. It is not required.
Deductible: amount of money you pay from your pocket before they cover.
Premium: what you pay per month.
Lower deductible- higher premium
Higher deductible- lower premium