MONEY BASICS
This is money you earn from a job.
Answer: What is income?
This account is used for daily spending and transactions.
Answer: What is a checking account?
This range is generally considered a “good” FICO score by lenders.
Answer: What is approximately 670–720?
This represents ownership in a company.
Answer: What is a stock?
This retirement account is provided through an employer and may include matching contributions.
Answer: What is a 401(k)?
Expenses that stay the same each month are called this.
Answer: What are fixed expenses?
This type of savings account earns higher interest.
Answer: What is a high-yield savings account?
This action improves your credit score most directly over time.
Answer: What is making on-time payments consistently?
This is a collection of investments owned by an individual.
Answer: What is a portfolio?
This retirement account is opened independently by an individual.
Answer: What is an IRA?
Expenses that change from month to month are called this.
Answer: What are variable expenses?
This account locks your money for a period of time for higher interest.
Answer: What is a CD (Certificate of Deposit)?
This FICO category makes up about 30% of your credit score and measures how much of your available credit you are using.
Answer: What is credit utilization?
These factors influence stock price movement: company performance, news, economy, and this human element.
Answer: What is investor behavior (emotion)?
This concept allows investments to grow exponentially over time by earning returns on previous gains.
Answer: What is compound interest?
These are occasional expenses that do not happen monthly.
Answer: What are periodic expenses?
This protects your money in a bank up to $250,000.
Answer: What is the FDIC?
This action can lower your credit score by reducing your average account age and signaling potential risk to lenders when done frequently in a short period of time.
Answer: What is opening multiple new credit accounts (or hard inquiries)?
This concept explains why reacting to short-term price changes often leads to poor decisions.
Answer: What is emotional investing or lack of strategy?
This is the primary reason starting early is more important than investing larger amounts later.
Answer: What is having more time for compound growth?
Explain the difference between a want and a need.
Answer: Needs are required for survival; wants are things that are not necessary.
Why might someone choose a CD over a regular savings account?
Answer: Higher interest in exchange for locking money.
This FICO category makes up about 5% of your credit score and refers to having a variety of different types of credit accounts.
Answer: What is credit mix?
This explains why the stock market can increase while many individuals struggle financially.
Answer: What is the market reflecting investor expectations rather than the overall economy?
This financial mistake prevents long-term wealth building even when income is sufficient.
Answer: What is failing to invest consistently or delaying investing?