Budgeting
An example of a long-term goal would be: 1.an annual vacation. 2.saving for retirement 3.buying a used car. 4.completing college within the next six months.
2.saving for retirement
What is credit?
Credit is the ability to borrow money or access goods or services with the understanding that you'll pay later
What two things are required for a savings account?
1. social security 2. Id with picture
What are savings?
Savings refers to the money that a person has left over after they subtract out their consumer spending from their disposable income
When you make a deposit what card has access to that money?
Debit Card
The budgeting process starts with monitoring current spending. True or false
True
Should you only pay the minimum due each month on your credit card?
No, pay more when possible
What is a savings account?
an account in which the bank pays interest for the use of the money deposited in the account.
Fixed expenses stay about the same each month. True or False?
True
This card allows you to build credit history
Credit Card
A clearly written financial goal would be: 1.To save money for college for the next five years 2.To invest in an international mutual fund for retirement 3.To establish an emergency fund of $4,000 in 18 months 4.To pay off credit card bills this year
3. To establish an emergency fund of $4,000 in 18 months
What are credit card benefits?
Great for emergency situations, may improve credit score, extra perks such as grace periods, reward points, travel insurance, purchase protection
What are debit card benefits?
Keeps track of what you spend, get cash at ATM, get cash at register if have PIN, won’t pay interest on purchases, protects you from spending money you don’t currently have
How old do you have to be to open a savings account?
18 years old
Which card requires money to be taken automatically out of a checking or savings account?
Debit Card!
What is commonly considered a flexible expense? 1.rent 2.a mortgage payment 3.home insurance 4.entertainment
4. Entertainment!
What are some additional fees that could come along with a credit card?
Late fees, annual fee, interest fees
What is something that you have to make when getting a debit card?
A PIN.
What causes a check to bounce? 1. someone added too much money to their checking account 2. the account holder wrote a check for more money than what they have in their account 3. there is a higher interest rate 4. there is more rubber in it
2. the account holder wrote a check for more money than what they have in their account
Which card requires money to be borrowed and then repaid at a later date?
Credit Card
The final phase of the budgeting process is to: 1.set personal and financial goals. 2.compare your budget to what you have actually spent. 3.review financial progress. 4.monitor current spending patterns
3.review financial progress!
What are credit card disadvantages?
Could pay interest, could be hit with late fees, higher interest rates and a lower credit score if miss a payment, pay fees if go over credit limit, may overspend and have unnecessary debt
What are debit card disadvantages?
Card can be declined if not enough money in your account
A higher rate of return on an investment means greater risk. a. True b. False
A. true
What characteristics are the same for both debit and credit cards?
Convenient, accepted everywhere, fraud protection, secure, replaces cash, plastic