Financial Literacy
Budgeting
Budgeting
What is a budget?
A plan for managing income and expenses over a certain period
If you pay a bill late, your creditor can not report this information to a credit bureau. True or False
False - making late payments can lower your credit score because it hints at financial difficulty by the borrower
This type of account typically pays interest on the money you deposit
What is a Savings account
What is gross income?
Total income earned before any deductions.
Name two ways you can be a victim of fraud.
unsecured passwords, sharing sensitive information, using Venmo with people you don't know, and using unreliable websites.
True or False
You will not have to pay for medical expenses if you have health insurance.
False. Your health insurance plan will help cover the cost of some expenses, however, based on the type of plan you have, you may have to pay out of pocket for expenses that are over the amount covered by the insurance plan.
True or False?
Having car insurance in CA is optional?
False
California law states, “All drivers and all owners of a motor vehicle shall at all times be able to establish financial responsibility and shall at all times carry in the vehicle evidence of the form of financial responsibility in effect for the vehicle.” If you do not have auto liability insurance, you can be fined, your license may be suspended, and your vehicle could be impounded.
Something that is borrowed; a sum of money that is expected to be paid back, WITH interest.
A Loan
A credit score (FICO score) is calculated up of differnt categories.
Amounts owed, New Credit, Length of credit hisotry, Credit Mix and Payment history. Which one has the of these categories has the highest percentages calculated into a credit score?
payment history (35%)
amounts owed (30%)
length of credit history (15%),
new credit (10%) and credit mix (10%).
What is the fee called when you spend more money than you have in your bank account?
Overdraft fee
This type of loan is used to purchase a home
What is mortgage
This is a company or agency that recovers unpaid debts for profit. These debts are unpaid past due balances such as unpaid credit cards, medical bills, or any other loans that weren’t paid.
What is a collection agency.
True or false
California sales tax is 7%.
False- California sales tax is 7.25%
True or Fale?
Yout must provide proof of car insurance when registering a new car.
you can register a car in California without insurance, but you must provide proof of insurance within 30 days. If you don't, the California DMV will suspend your vehicle's registration
A card issued by a BANK, that allows the holder to transfer money electronically from their bank account when making a purchase.
Debit Card
(Not to be confused with a credit card)
Good credit allows you to pay ________ amounts of interest.
smaller
True or False
Unpaid debts or loans do not impact your credit score.
False
What is net income?
income remaining after all deductions, such as taxes and retirement contributions, have been taken out.
List two Voluntary deducations from a paycheck.
Health insurance, retirement, dental insurance, life insurance, etc.
What is a pending transaction?
An approved transaction that may be reflecteed in your account balance but has yet to be fully processed.
True or False
Having auto insurance protects you from all liability and costs related to car accidents.
False-
Not all auto insurance plans are the same and some of them will only cover certain circumstances.
I have enough money to pay the balance of my credit card, but I just pay the minimum monthly payment. Is that the best financial decision? True or False
*False*
Paying the minimum amount is not ideal. A person is charged interest when their credit card balance is not $0 by the end of their billing cycle.
List three things that impact your credit score.
1.) Length of credit
2.) Revolving utilization
3.) Missed payments
Name 2 banking institutions in your neighborhood
Bank of America, Chase, PNC, Wells Fargo, Citizens
This is the term for expenses that vary from month to month, like groceries, utilities, and entertainment.
What are "Variable Expenses
What does the acronym "ATM" stand for?
Automated Teller Machine
TRUE OR FALSE
The FDIC (Federal Deposit Insureance Corporation) is is an independent U.S. government agency that insures deposits in the event of a bank failure.
TRUE
In California, a motorist who exceeds the speed limit or safe speed, but isn't going faster than 100 miles per hour, will be fined based on how fast they were going past the speed limit.
True
Receiving a paycheck on a bi-weekly schedule (every other week)
Weekly (once a week)
Semi-monthly (twice a month)
Monthly (once a moth) Is called…
A Pay Period
This three-digit number can greatly impact your ability to get loans, rent apartments, and even get a job.
What is a credit score?
What should your credit card balance be (by the end of the month) to avoid interest charges?
It should be $0.00 by the end of the month.
This expense category includes payments for electricity, water and heating
What are "Utilities"
List two mandatory deductions from a paycheck.
Federal and state income tax
TRUE or FALSE
Banks Credit Unions are exactly the same.
False-Banks and credit unions usually have different ownership models. Banks tend to be for-profit institutions owned by shareholders that offer banking services regionally or nationally. Conversely, credit unions are usually non-profit entities owned by their members and serve their local communities.
However, you will find differences in fees, interest rates, product offerings, convenience, and customer service, although each financial intuition differs. Credit unions tend to offer lower fees and interest rates on loans and credit products, as well as more personalized customer service. However, banks may offer more variety in loans and other financial products and more extensive networks that can make banking more convenient.
Give a realistic average price for an oil change.
A correct answer should be within the amount range indiciated indicated on the answer.
$65-100
This also varies based on the amount of iol the care requires and the type of oil used (ex: regular vs. synthetic)
Things that are required for survival and things that a person would like to have but are not needed for survival.
Needs and wants
Having debts and credit is bad and should be avoided at all cost.
False- not all credit and debts are equal, but as long as you can use it responsibly, credit can be benifical.
It is not necessary to save if you make plenty of money.
False- Everyone needs to budget
bills such as rent, utilies, car payments, etc are..?
Fixed expenses
The only two parts of a budget are income and outcome.
FALSE- a budget consists of income, fixed expenses, debt, flexible and unplanned expenses and saving.
True or false
Anyone in California can apply for and recieve unemployment benefits.
False-
Name two ways you can get points on your driving record and what is the impact of having points?
Moving violations, accidents, Court convictions (DUI, Reckless driving).
typically resulting in license suspension
cause increased insurance premiums due to being seen as a higher risk driver by insurance companies