Building Healthy Financial Habits
Budgeting and Savings
Credit Basics
100

What are needs and wants? Define and give examples.

Needs- Things that are necessary for you to live

Wants- Things that you don't necessarily need but desire.

  • Ex. of needs might be food, rent, school supplies, bus pass.
  • Ex. of wants might be specialty coffees, designer clothing, and eating out.
100

What are some ways you can track your spending?

1. Looking at your bank statements and receipts 

2. Using an app on your phone or a word document

100

Who are the three credit bureaus?

TransUnion 

Equifax 

Experian

200

What is the difference between a checking and savings account?

Savings: A savings account is a deposit account that is specifically designed to hold money that you don't plan on spending immediately

Checking: Used for everyday spending and paying bills. Is usually more easily accessible than savings

200

How can you start budgeting?

1. List all forms of income

2. Track your spending

3. Identify areas that can be improved on 

4. Check your bank statements

(or any other acceptable answer)

200

What's the difference between a hard and soft inquiry?

  • Soft Inquiries
    • Don't affect your credit score
    • Done by creditors to provide preapproved offers
    • Can be done without your consent
    • ex. when you receive a credit card offer in the mail, background checks, or when you check your credit
  • Hard Inquiries
    • Affect your credit score (though shouldn't be a big deal in the long run unless you apply for multiple in a short period).
    • Done by creditors and lenders when you apply for credit or loan
    • Need to give written consent
    • ex. when applying for a car loan you may be asked to sign a credit report authorization form, credit card applications, etc
300

What can you do to keep track of your spending? 

Journal or record your monthly spending in a journal, online document, or by using an app.

300

What is an APY?

Annual Percentage Yield or APY is the rate of interest earned on your savings account balance.

300

Why does good credit matter? 

  • Credit will determine your ability to receive a loan and the interest rate you will be charged
  • Credit is tied to many things such as:
    • Car loans
    • Employer background checks
      • May vary based on state and employment type
    • Ability to rent an apartment or get a phone
    • Security deposit for bills
400

What is the 50-30-20 rule?

50% Needs

20% Savings

30% Wants

400

How do savings accounts work?

Many savings accounts limit the number of withdrawals or transactions you can make. It is specifically designed to hold money that you don't plan on spending immediately. 

Savings accounts usually accrue interest (APY!)

400

What are some ways to obtain credit?

  • Apply for a credit card
    • Student Cards
    • Secured Card
    • Store cards (charge cards)
  • Apply for a loan
    • Credit builder loan
    • Personal loan
    • Auto loan
    • Student loan
500

What are examples of being financially healthy?

Being debt free or having a manageable amount of debt

Earning enough to cover your weekly expenses. 

Feeling confident about your finances

Having a savings 

etc..

500

What is a budget and why is it important?

A budget is a financial tool that allows you to plan and visualize how much income you receive and track your expenses month-to-month.

Budgeting helps you clearly see your finances and identify what areas you can improved on.

500

What is the difference between a credit score and a credit report?

  • A credit score is a 3-digit number that serves as a snapshot of your financial situation
  • It is used to represent the likelihood that you will pay your bills/loans/debt on time

CREDIT REPORT

  • AKA credit file or credit history
  • Your personal credit report includes a record of your personal information, account summary, employment history, account and payment history, collections and public records, and inquiries.
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