Credit & Debit
What is a debit card?
A card that uses money directly from your bank account.
What is income?
Money you earn or receive.
What is insurance?
Protection against financial loss
What is a budget?
A plan for how you will spend and save your money.
What does PYF mean?
Pay yourself first.
What is credit?
Borrowed money that must be paid back later.
What is the difference between gross and net income?
Gross is total earnings; net is what you take home after taxes.
What do you pay monthly to keep insurance active?
A premium.
Why is it important to track your expenses?
To make sure you don't spend more money than you have.
What is a savings account?
A bank account where you store money safely and earn interest.
What is interest?
The cost that gets added after missed payments on credit bills.
A paycheck from a job.
Why do people have health insurance?
To help pay medical costs.
What are examples of expenses that do NOT change each month?
Rent, phone bills, car payments
Two students each save $50 per month. Student A keeps it in a jar at home. Student B puts it in a savings account with interest. After one year, who will likely have more money and why?
Student B, because their money earns interest over time.
What happens if you only make minimum payments on a credit card?
You pay more interest over time and stay in debt longer.
What is a benefit of having multiple sources of income?
More money, less financial risk.
What is a deductible?
The amount you pay before insurance starts covering costs.
A student earns $1,500 a month. Their expenses are $1,200 fixed (can't change) and $400 variable (can change). What is their budget situation?
They are overspending by $100 (deficit).
Why is "pay yourself first" a good saving strategy?
It ensures you save money before spending it anywhere else.
What is credit score used for?
To measure how trustworthy you are with borrowing money.
Why might two people with the same job earn different incomes?
Experience, education, location, or hours worked.
Why is insurance important even if you don't use it often?
It protects you from large, unexpected expenses.
What is one strategy you can use to balance a budget if you are overspending?
Reduce expenses or increase income.
Why is it risky to keep cash at home instead of a bank?
It could be lost, stolen, or not earn interest.