Financial Literacy General
Define financial literacy
Finance: The management of money
Literacy: Having an expanse of knowledge in a certain subject
What are 3 key ideas for saving Smart?
1. Create a budget
2. Pay yourself first and save
3. SMART - Set financial goals
Borrowing money from a bank is an example of a
Loan
Someone who buys and sells stock professionally
Stockbroker
Clothing is an example of a...
Need
Define Budget and explain its purpose
A budget is a plan for your money that shows how much you much earn, spend, save, and share. It's purpose helps you keep track of your income, control of your expenses, save for goals, and avoid running out of money
What type of savings account earns you money while saving with that bank?
Interest earning savings account
Which card pulls money directly from your bank account?
Debit card
A common account used through a bank
Checking account
A PlayStation 4 is an example of a...
Want
The 50/30/20 Rule
Half 50% of your income should cover essentials like housing, food, utilities, transportation, and healthcare. The other two break downs will function as one-third 30% going towards non-essentials, such as eating out, shopping, travel, hobbies, entertainment, and subscriptions (Netflix). The rest 20% will go towards building your future. Savings, emergency funds, investments, or paying off debt.
This type of interest is earned not only on the money you put into the principal, but also on the interest that has already been added to your account.
Compound interest
Credit score ranges (6)
300-599 Very Bad
600-649 Poor
650-699 Fair
700-749 Good
750-799 Very Good
800-850 Excellent
The original amount of money put into an investment
Principal
Water is an example of a...
Need
Guess The Price (SC)
$ Eggs $ Fast food combo meal (1pp) $ 1 Bedroom apartment
$5.76 for 1 dozen
$10-12
Avg. in SC $1246 (Greenville $1279; Anderson $1242; Columbia $1149)
What type of fund helps you cover unexpected costs that come with everyday life? What is the suggested small build amount to start with?
Emergency Fund. $300 (Build to a 3-6 month cushion of expenses)
Where to locate your credit report for free
Experian, TransUnion and Equifax - You can receive annual credit reports for free
Type of interest that grows over time at very fast rates
Compound Interest
Something that is necessary in your life that you cant live without would be...
A need
The sum of all income before deduction of taxes
Gross Income
Define SMART:
S-Specific amount; M-Measurable-be able to track; A-Achievable-keep it realistic; R-Relevant – your goals should matter to you and your life; T-Time bound – have a deadline
What are the 2 biggest factors that affect your credit score:
1. Payment history (makes up 35%) Not missing payments, pay more than the minimal
2. Credit utilization (makes up 30%) Percentage of your available credit limit that you are currently using
True or False: You can be charged a fee for using an ATM that isn't your bank.
True
Something that is not necessary in your life but is something you would like to have would be...
A want