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This is a description of the envelope method of budgeting.
Put cash into envelopes with category names for spending.
This is the money earned AFTER taxes and deductions are taken out.
What is NET pay?
This is the number rating representing a person's ability to pay off debt.
What is Credit Score?
True or False? Collection agencies are allowed to call you multiple times during the day.
What is: True
List the following investment types in order from lowest to highest risk:
Bonds, Savings Account, Stocks
What is: Savings Account, Bonds, Stocks?
This is the range of credit scores.
What is 300-850?
This is the money earned BEFORE taxes are taken out.
What is GROSS pay?
Explain what an APR of 20% means
This is the yearly cost of borrowing money. For instance, if you borrowed $1000, you would owe 20% of $1000 = $200 in interest payments PLUS the original amount borrowed.
This is the type of debt management plan that pays the highest interest debts first and works down toward the lowest interest debts.
Having many different types of investments.
What is DIVERSIFICATION?
If you never want to pay interest or fees on your credit card, this is what you should do.
Pay your credit card bill on time and in full every month.
This is what it means to have a budget DEFICIT. (For example, a budget deficit of $500.)
You have overspent by $500.
What are 2 of the factors that impact your credit score?
Examples:
payment history
amount owed (credit utilization)
Length of credit history
New Credit
Mix/Type (diversity) of credit
This is the type of debt management that suggests paying off the smallest debt first and then working up toward the largest debt payments.
What is the snowball method?
This is a type of mutual fund that just MATCHES the market (like the S&P 500). It is ALREADY diversified.
What is an INDEX FUND?
What is the credit score for someone who never borrowed money and does not have a credit card?
Doesn't exist.
Explain the 50/30/20 budget method.
Spend 50% of your net pay on needs,
30 % on wants, 20% on savings.
This is the difference between leasing and financing a car.
Leasing: you don't own the car. You essentially "rent" the car
Financing: you borrow money to pay the full price of the car ( you own the car)
This is the type of chapter bankruptcy that you can file and they repossess your stuff to pay your debt.
What is chapter 7?
This is an EMPLOYER Sponsored retirement plan based on the money YOU will also contribute.
If they offer a match, max out that amount!
What is a 401K?
This is the day that you have to file your taxes by. You can file taxes online at IRS.gov.
April 15.
This is a situation in which you spend more than you have in your account, and the bank "loans" you the money. You have to pay it back WITH fees.
Name TWO of the 3 major credit bureaus.
What is
TRANSUNION
EQUIFAX
EXPERIAN
This is the type of debt is NOT forgiven even after you file for bankruptcy.
What is student loan debt, tax debt, etc.
This is the type of retirement account that YOU set up (not your job). It also allows for tax free growth since you've already paid taxes on the money you put in so that you won't pay taxes when you take it out again.