Credit and Debit
What is a credit score?
A number that represents your creditworthiness.
What’s one good reason to create an emergency fund?
To cover unexpected expenses, like medical bills or car repairs.
What is the stock market?
A place where shares of publicly traded companies are bought and sold.
What is the purpose of a W-2 form?
It reports your annual wages and the taxes withheld.
What does "net income" mean?
The amount of money you take home after taxes and deductions.
What’s the typical minimum credit score needed to qualify for a good loan?
Around 670 or higher.
What’s the difference between renting and owning a home?
Renting means paying to live somewhere owned by someone else, while owning means you have purchased the property.
What does it mean to diversify your investments?
Spreading your money across different types of investments to reduce risk.
What is the sales tax?
A tax on goods and services, usually a percentage of the price.
What is the recommended percentage of your income to spend on housing?
30%
If you pay only the minimum payment on a credit card, what happens?
You’ll pay more interest, and it’ll take longer to pay off the debt.
Name one way to protect yourself from identity theft.
Use strong passwords and monitor your financial accounts regularly.
What is a 401(k)?
A retirement savings plan offered by employers.
What does it mean to “itemize deductions” on your tax return?
Listing individual tax-deductible expenses instead of taking the standard deduction.
Name two fixed expenses and two variable expenses.
Fixed expenses: Rent, insurance. Variable expenses: Groceries, entertainment.
What’s the term for the yearly cost of a loan, including interest and fees?
APR (Annual Percentage Rate).
What does "cost of living" mean?
The amount of money needed to cover basic expenses like housing, food, and transportation in a specific area.
Name one key difference between stocks and bonds.
Stocks represent ownership in a company, while bonds are loans to a company or government.
What is FICA, and what does it fund?
Federal Insurance Contributions Act; it funds Social Security and Medicare.
If your monthly income is $2,500, and your total expenses are $2,400, how much do you have left to save?
$100
How can checking your credit score regularly help you?
It helps identify errors or fraud and tracks your financial health.
Why is it important to compare interest rates when taking out a loan?
To find the best deal and save money over time.
What is compound interest, and why is it important for investing?
Interest calculated on the initial principal and the accumulated interest, helping investments grow faster.
Why might someone receive a tax refund?
Because they overpaid taxes throughout the year.
What’s one way to reduce your monthly grocery bill?
Use coupons, buy in bulk, or meal plan.