Banking Basics
What is a checking account?
A checking account is used for everyday transactions like purchases and bills.
What is a budget?
A budget is a plan that details income and expenses to support financial goals.
What is credit?
Credit is borrowed money that must be repaid, usually with interest.
What does FAFSA stand for?
FAFSA stands for Free Application for Federal Student Aid.
Why is saving important?
Saving is important for emergencies and future goals.
What is a savings account?
A savings account is used to store money securely and earn interest over time.
What is the 50/30/20 rule?
The 50/30/20 rule: 50% for needs, 30% for wants, 20% for savings.
What is a secured credit card?
A secured credit card requires a cash deposit as collateral.
What is a subsidized loan?
A subsidized loan is need-based; the government pays the interest while in school.
Why is important to build good credit habit?
Good habit: higher access to loans and credit cards, higher credit limits, lower interest rate, easy approval for rentals
Name one document needed to open an account.
One document needed is a valid government-issued photo ID, Social Security, Birth Certificate.
Name one fixed and one variable expense.
Fixed: Rent, Mortgage, loans, taxes , internet and cable bills
Variable: Groceries, clothing, gasoline, entertainment, electric/gas, emergencies
What are the 5 components of a credit score?
Payment history (35%), credit usage (30%), credit age (15%), account mix (10%), inquiries (10%).
What is the difference between dependent and independent?
Dependent students must report parent info; independent students meet criteria like age 24+, married, veteran, etc.
What are the consequences of a bad credit habit?
Bad habit: difficulty obtaining loans, higher interest rates and stress.
Name one type of savings account.
One type of savings account is a Personal Savings Account, IRA account or Certificate of Deposit.
What’s the difference between needs & wants?
Needs are essential for living (e.g., rent, food); wants are non-essential (e.g., entertainment).
What is a credit builder loan?
A credit builder loan is a small loan held in a savings account until repaid.
Name one type of financial aid.
Types include grants, work-study, scholarships, and loans
Name one tip for managing your money.
Automate deposits and track spending, review purchases & hold yourself accountable.
Name one bank mentioned in the presentation.
One bank mentioned is Capital One (others include SoFi, Discover, Ally, CIT Bank, American Express).
Apply the 50-30-20 budgeting rule to 10,000.
What is APR and why does it matter?
APR is the annual percentage rate, the cost of borrowing money.
What is loan forgiveness?
Loan forgiveness is when part or all of your student loan is canceled under certain conditions (e.g., public service, teaching).
Why must we learn to read credit cards?