Earning Income
What's the difference between a wage and salary?
Wages are hourly payments for the amount of work done, and salaries are fixed annual payments regardless of hours worked.
What is the difference between a debit and credit card?
When you use a debit card, the funds for the amount of your purchase are taken from your checking account almost instantly. When you use a credit card, the amount will be charged to your line of credit, meaning you will pay the bill at a later date, which also gives you more time to pay.
Describe one advantage of saving money in an account at a financial institution rather than keeping the money at home.
Safety and Security
Earning Interest
FDIC/NCUA Insurance
Financial Management
Building Credit and Financial History
Access to Additional Services
Convenience
Emergency Access
Budgeting and Saving Tools
Why do people invest?
Even though investing is more risky than a traditional savings account the return can be much greater over years.
-Save for retirement
-Build wealth
-Put your money to work
When you take out a mortgage, what is the required collateral?
The home you are buying.
What are two examples of benefits your employer may offer?
Insurance, retirement account, vacation, sick time, flexible hours, tuition reimbursement, discounts, professional development, etc.
________________ is a sustained increase in the general price level of goods and services in an economy over a period of time, leading to a decrease in the purchasing power of money.
inflation
What is compound interest?
Compound interest is the interest calculated on the initial principal amount as well as on the accumulated interest from previous periods. In other words, it’s "interest on interest".
What is a government bond?
A government bond is a type of debt-based investment, where you loan money to a government in return for an agreed rate of interest.
What are the three major credit bureaus?
Equifax, Experian, and TransUnion
What is form W2?
What is the 50/30/20 rule?
A budgeting strategy that allocates 50% of your after-tax income to needs, 30% to wants, and 20% to savings and debt payoff.
What are two types of IRAs?
Traditional, Roth, SEP, Simple
This type of investment represents partial ownership in a company and can be traded often.
Stock
What is a deductible?
The amount of money an insured person must pay out of pocket for covered healthcare services before the insurance plan starts to cover costs.
What is a W4?
Employee's Withholding Certificate:
Complete Form W-4 so that your employer can withhold the correct federal income tax from your pay.
What does CFPB stand for?
Consumer Financial Protection Bureau
What tax form do you get if you get $50 in interest in a year?
Although not required in NH anymore, this would be a 1099 INT form!
This popular investing rule says you shouldn’t “put all your eggs in one basket.” It encourages spreading your money across different assets.
diversification
On most scales, what is the highest credit score you can have?
850
Name 3 potential sources of retirement income.
Social security, employment, annuities, HELOC/loan, CDs, pension, 401k, IRA, bonds, dividends, stocks, HSA, Assets, inheritance, investments, savings.
Name 3 reasons why someone would rent a home vs buy one.
Affordability, flexibility, the avoidance of maintenance costs and property taxes, low credit score, not a large down payment(security deposit) and the ability to move more easily.
Using the rule of 72, how long would it take your $5,000 to double with a fixed rate of 4%?
18 years.
72/4=18
_____________________ are a way for multiple investors to pool their money together, allowing them to invest in a diversified portfolio of stocks, bonds, or other securities, managed by a professional fund manager.
mutual funds
There are two most common types of personal bankruptcies. Name one!
Chapter 7 bankruptcy- Liquidation
Chapter 13 bankruptcy - Wage Earners or Reorganization