Budgeting and Saving
What is a Budget
A plan for how you spend and save money
What is the purpose of Insurance in a sentance
To protect against financial loss or risk
What is one things taxes are commonly used to pay for
public services roads schools ext
What type of car car you use without going into debt
Debit card
What is one reason someone might choose a trade school
Faster entry into a career
What is an emergency fund used for?
Unexpected expenses like car repairs or medical bills
Why do people with riskier driving records usually pay higher premiums?
They are more Likley to file claims
why might two people with different incomes pay diffrent amounts in taxes
Taxes are often based on income level
Why might using a credit card responsibly be beneficial
it can help build a credit history
Why might someone start a community collage before transfering
to save money
If your expenses are higher then your income what is this called
Deficit
If some one chooses a higher deductible how does that affect their premium
The premium is usually lower
If to little tax is taken out of your pay check what may happen at tax time?
You may ow money or get auddited
What is one major risk ob By now pay later services
Overspending or accumulating hidden debt
what is one financial advantage of entering the work force right after high school
Immediate income with no tuition debt
A person saves money but keeps it in cash at home. What is the major financial disadvantage?
IT does not grow no intreset and may lose value due to inflation
Why might someone choose a higher premium but a lower deductible
To pay less out of pocket in an emergency
Why is it important to keep records of income and expenses
To accurately file taxes and avoid errors
How does interest make purchases more expensive over time
you pay more than the original price due to borrowing costs
Whys is it important to consider return on Investment (ROI) when choosing education
to ensure future earnings justify the cost
Why is Compound Interest more powerful over long periods than short periods even with small contributions?
Because interest earns interest over time creating exponential growth
Explain why insurance companies use probability when setting rates
They calculate ricks based on data to predict the likelihood of claims
How can tax withholding affect your monthly budget thoughtout the year
More with holding= smaller paychecks, less withholding=larger paychecks but possible tax bill later
Why does making only minimum payments significantly increase the total cost of a purchase
Interest continues to build on the remaining balance over time
Compare the long-term financial risks of student loans vs not pursuing further education
loans create debt obligation but skipping education may limit earning potential