Budgeting
What is the difference between a need and a want?
A need is something that is required for your survival/well being while a want is something that you would enjoy having.
What is a deposit?
The money you put in a bank
What is a credit score?
A score that shows how responsibly you borrow
Why should you invest early?
The power of compound intrest
Name one question that you should ask yourself before buying something.
What is the rule for budgeting your money?
50% for needs, 30% for wants and 20% for savings
Which account is meant for everyday spending?
Checking
What is the range for a credit score?
300-850
Which investment is more stable: stocks or bonds? Explain why?
Bonds because they are legal loans with fixed interest payments, set maturity dates, and higher priority during a company bankruptcy
Name two financial mistakes
Spending more than you earn, carrying credit card debt, waiting too long to save, poor investments, impulse buying.
What budget method uses up every dollar?
Zero-Based Budget
Which account should accumulate intrest over time?
Savings
Which type of card uses your money directly?
Debit card
Which investment represents buying ownership of a company?
Stocks
What is the fix for carrying credit card debt?
Pay your balance in full every month
What does it mean to reverse budget?
Save or invest before spending
What is reconciliation?
Checking bank records to make sure they match your personal records; gives you the ability to detect fraud
What three things can improve your credit score?
Paying bills on time, length of credit history, and keeping your credit balance low
What is the main benefit of an ETF?
Diversification
What are the causes of poor financial decisions?
Instant gratification, peer pressure/FOMO, overconfidence, social media, or lack of financial knowledge.
Name a bad budgeting habit we discussed.
Ignoring irregular expenses, being unrealistic, rigid budgeting, or extreme restriction.
What are the 3 different types of savings accounts?
High-Yield Savings, Traditional Savings, and Certificate of Deposit (CD)
What is the difference between secured and unsecured credit?
Secured requires collateral while unsecured is built on trust.
What were the four types of investments discussed?
Stocks, Bonds, Commodities, and ETF's.
Which option from the first question we asked would you choose and why?
2 or 3 depending on justification