Budgeting
A budget is only for people who don’t make much money.
False
Money in a savings account grows faster than most investments over 10 years.
Using a credit card responsibly can help build your credit score.
True
Your first job always defines your lifelong income.
False
Impulse purchases don’t affect your financial health.
False
Name two fixed monthly expenses everyone typically has.
Rent/mortgage, utilities, phone, insurance, etc.
Name two benefits of having an emergency fund
Covers unexpected expenses, reduces debt risk, peace of mind
What’s a minimum monthly payment?
The smallest amount you can pay to keep your account in good standing
What are two sources of income for students?
Part-time job, allowance, freelance work, scholarships with stipend
Name two types of financial aid besides grants.
Scholarships, loans, work-study
You earn $1,500 a month. Rent = $600, Food = $200 Transportation = $100. How much is left for savings and fun?
$600
What is compound interest?
Interest earned on both the original amount and accumulated interest
Name one danger of high-interest loans.
Debt grows quickly, can become unmanageable
What’s the difference between gross and net pay?
Gross = total income before deductions; Net = income after deductions
What is the difference between a grant and a loan?
Grant = free money, Loan = must be repaid
You have a monthly income of $3,000 and want to allocate 50% for needs, 30% for wants, and 20% for savings/investments (50/30/20 rule). Calculate each allocation and explain why this budgeting method is effective.
Needs $1,500, Wants $900, Savings $600; balances spending and saving while maintaining financial health.
Which is generally riskier: a savings account or the stock market?
Stock market
Explain the difference between subsidized and unsubsidized federal student loans.
Answer: Subsidized loans don’t accrue interest while in school; unsubsidized loans do accrue interest from disbursement.
Name one benefit and one drawback of working during school.
Benefit = extra income, experience; Drawback = less free time, stress
What factors affect how much financial aid a student can receive?
Family income, number of family members in college, FAFSA info
You’re comparing two credit cards: Card A charges 15% APR with no annual fee, Card B charges 12% APR but $100 annual fee. If you plan to carry a $1,000 balance for a year, which card costs less?
Card A costs $150; Card B costs $120 + $100 = $220; Card A is cheaper
If you invest $1,000 at 5% annual interest, compounded annually, how much will you have in 3 years?
$1,157.63
Explain why paying only the minimum on a credit card balance is costly over time.
Interest accumulates, balance takes longer to pay off
Explain how career choice affects long-term financial goals.
Salary, benefits, growth opportunities impact savings, lifestyle, debt repayment
Discuss a situation where taking on a loan might be a smart decision.
Investing in education, buying a home with manageable payments, starting a business