Credit and Loans
What is a credit score?
It is a number that shows how well you do with repaying debts or loans on time.
What is an emergency fund?
Savings that were set aside incase an Emergency arises.
What is a security deposit?
Money you give the landlord to cover damages or unpaid rent.
What is a down payment?
The initial Upfront payment when you purchase your car.
What is insurance?
It is something that protects you incase of financial losses or damages.
What is APR?
Annual Percentage Rate, it is the money that is charged yearly on any loans.
What is compound interest?
It is interest that is earned by the money you've saved and from past interest aswell.
What is a lease?
It is a type of contract that lets you rent a home for a period of time.
Name one expense of owning a car besides the loan.
Insurance, Gas, Maintenance or Registration Fees
What does a deductible mean?
It is the amount that you pay with your own money before insurance covers the rest
What is a Minimum Payment on credit cards?
The smallest amount you must pay each month to avoid late fees. It is based on your balance
What is a stock? (Wager Question)
A share of divided ownership from a company. Eg: You own a stock that is equivalent to .5% of ownership to that company.
What does buying a house provide? (Wager Question)
You get to build your equity and customize your home to your liking. (Points if one mentioned)
What does depreciation mean with cars?
The loss of the car's value over a period of time.
What is liability insurance?
Insurance that covers damage or any injury you have caused to someone else.
What is the risk of only paying the minimum balance on a credit card?(Wager Question)
You end up spending more on interest and take longer to pay off your balance.
What is diversification in investing?
It is when you spread your money across different investments to minimize risk.
What is property tax?
It is a tax that homeowners pay based on the Equity of their home.
What is the purpose of a vehicle history report?
To check for any issues like accidents, repairs or title issues before buying a car.
What does premium mean? (Wager Question)
It is the amount that you pay monthly or yearly so your insurance is still active.
What is a Secured Loan?
It is a loan backed by collateral. Eg: House, Car, etc.
What is the difference between a Roth IRA and a traditional IRA?
Your Roth IRA is taxed first, but taking money out is not taxed. A traditional IRA you dont pay taxes when contributing to, but pay taxes upon withdrawal.
What does home insurance provide protection against?
It protects you from the cost of damages to your home or if it is destroyed. Eg: Fire, Thefts or Tornadoes
What is a lease vs. buying a car? (Wager Question)
Leasing means renting the car but you have to return it. Buying means you own the car outright.
Why is renters insurance important even if you dont own the house?
It protects your belongings incase of theft and also provides liability if someone is hurt in the house you rent.