Mindful Spending / Goals
This rule helps us distribute how much we earn according to our savings, wants, and needs. And what percentage of your income should go to each category?
What is the 20/30/50 rule?
20% savings
30% wants
50% needs
Provide 1 good reason why a bank is safer than hiding your money under the mattress.
This financial product allows account holders to access the funds in their checking account with a 4 digit pin.
What is a debit card?
The percentage of a loan that a borrower agrees to pay the bank, in addition to the amount that they borrowed.
What is interest?
In investing you can reduce risk, while in gambling you have no way to mitigate risk.
With each paycheck we say that you should “pay yourself first” - 20% of each paycheck should go here.
What is savings?
This is an account that’s commonly thought of as “your money.” It’s easy to withdraw from, in fact, Debit Cards withdraw from these accounts
What is a checking account?
This is a tiny sliver of a company that you can buy.
What is a stock?
What is APR and what does it stand for?
APR stands for Annual Percentage Rate
APR is the interest rate for the whole year, “annual” meaning yearly.
What is diversification of investments and why is it important?
Diversification reduces the risk of investments, so if an investments has poor performance it won't have a large affect on your portfolio.
If following the 20/30/50 rule, this is how much money should go toward your needs per paycheck, assuming you make $1200 per pay period.
What is $600?
This form of interest 'stacks' on itself. What is its formula?
What is compound interest? P(1+(r/n)^(nt)
This is an institution that provides easy, short-term loans, but they have dangerously high interest rates that are described by some as “debt traps”
What are payday lenders?
How does money go onto your credit card? Explain how a credit card works.
What is a line of credit? You are basically spending money you are borrowing that will be paid back later.
What is the S&P 500 Index?
The S&P 500 Index reflects the performance of the 500 largest stocks in the New York Stock Exchange and NASDAQ.
What are the two helpful budgeting techniques? And briefly explain them.
Pay-Yourself-First Method. This is where you put a portion of your paycheck into your savings, retirement, emergency or other goal-based savings accounts before you do anything else with it.
Envelope Method. This is where you take a few envelopes, write a specific expense category on each one — like groceries, rent or student loans — and then put the money you plan to spend on those things into the envelope.
This account is meant to store your money for a longer period of time, and you receive small interest payments for the money you deposit here
What is a savings account?
A debit card allows you to access anyone of these machines, letting you withdraw from your checking account.
What is an ATM (automated teller machine)?
How will these two scenarios affect your credit score:
1) Paying off a credit card with a credit card
2) Pay your credit card bill in full
1) Lowers your credit score
2) Boosts your credit
What company has the largest market share?
a) Tesla
B) Amazon
C) Apple
D) Snapchat
What is Apple (APPL)?
Give an example of a goal that is:
SMART: Specific, Measurable, Attainable, Relevant, Time-Based
Answer will be judged by mentors
There are two different kinds of banks; these banks deal with securities, corporate loans, and private equity.
What is an investment bank
What makes a credit card different from a debit card?
Credit cards spend on credit that is agreed to between a cardholder and financial institution. Institutions charge interest on the balance left on the card, whereas money used on your debit card is directly pulled from your bank account. You borrow money with a credit card, not a debit card.
This is the name for a loan that someone will take out in order to purchase a home.
What is a mortgage?
What is the difference between primary and secondary markets? Who are the relevant parties in each market?
In the primary market, stocks are directly issued by companies to buyers to raise capital. A company’s IPO happens in the primary market. In the secondary market, stocks are sold between buyers and shareholders, rather than the issuers themselves. Traders mostly use the secondary market.