Smart Shopping
What is income?
money you earn
Why is it important to create a budget?
So that you have money for your needs, wants, and savings.
What is the difference between a wage and salary?
wages are paid hourly and salary is for a longer period of time.
What is the difference between a job and a career?
You will get your first "job" in high school or sooner. Your career will be what you decide to do to make a living on your own.
What is the advantage of a savings account over a checking account.
Food cost, entertainment, electricity bill are all types of what expenses?
variable expenses
In a 50/30/20 budget, what does the 50 represent?
The percent of your income that is spent on needs.
What is a credit score?
a number assigned to everyone based on their ability and willingness to pay debts on time.
What is gross vs net pay?
gross: amount you earn (before taxes taken)
Net: the amount after taxes that you get to keep
What is a savings and checking account used for?
savings: emergency money and saving for big ticket items
Checking: everyday living expenses
House payment, rent payment, cell phone bill, and insurance payment are all types of what kind of expenses?
Fixed Expenses
In a 50/30/20 budget, what is the 30?
wants
What is the SINGLE MOST important factor on your credit score?
paying bills ON TIME
Why do we pay income taxes?
to pay for things that all of society will benefit from.
Parks, hospitals, police, schools, military, etc.
What does risk & return mean?
risk: chance of losing money
return: the money you make on your investment
If you buy a carton of 12 small chip bags for $15, what is the unit price?
$1.25 per bag of chips
In a 50/30/20 budget, what is the 20?
percent of your income you put into savings & investments.
When should you use a debit card and a credit card?
Debit card for daily living expenses and a credit card for emergency & needs only.
What factor about attending college saves you the most money.
Attending an IN-STATE school.
low risk investments get low returns
high risk investments hope for high returns
What is the opportunity cost of going to college after high school instead of working right away?
The money you would have made during those college years AND the value of your future investments.
What should happen if your needs spending is higher than your 50%?
You could...
reduce your expenses
find a way to increase income (second job)
make up the difference with your wants budget
To avoid paying interest which makes whatever you bought more expensive.
What are the options after high school?
What are stocks, bonds, and mutual funds?
stocks: buying a piece of a company
bonds: loan to a company
mutual funds: a mixture of stocks and bonds