Income/Taxes
An asset is something you own/something that can make you money. Paid off car, house, stocks, investments, cash, bank accounts, etc.
Give me 3 examples of variable expenses.
Gas, Food, fun money, shopping, utilities, etc.
True or false: Payment history is used in the calculation of your credit score
True
How much does the FDIC and NCUSIF insure for an individual account?
$250,000
What is the term for the price you pay when an accident happens before your insurance starts paying?
Deductible
This is the money that you take home after taxes and deductions are taken from your paycheck
Net Pay
What is the definition of a "Zero-Based Budget"
Budgeting every single dollar you make
True or false: Lenders will likely determine a DTI of 30% to be good
True
Banks are for-profit
Explain to me what inflation is and what it has to do with investing
It's when the price of a good or service goes up. It means that you have to invest money that keeps up with inflation or your money is losing value.
Give me 2 examples of a liability
Car payment, mortgage/rent, credit card debt, student loans, etc.
How do you calculate Net worth?
Assets-Liabilities
Name 2 of the 4 C's of Credit and give me their definition
Capital-Assets you own
Capacity-Ability to Pay
Collateral- Something you put on the line for credit
Character-Your history
2.) Banks did not have to keep some money stored and could loan out everything if they wished.
In auto insurance, collision and comprehensive coverage is legally required
No, only liability insurance and uninsured insurance are required.
What is the definition of gross pay?
The amount of money in your paycheck before taxes or deductions are taken out.
A Smart budget spends every dollar you make, gives every dollar a category, and what else?
Has money left for saving/giving
What is the formula for Simple Interest?
P x I x T
Mortgage, Auto loan, CDs, IRAs, various other loans
Describe to me what a mutual fund is
You pool your money together with other investors and a financial manager diversifies your investments with that money.
Medicare, Medicaid, Federal Income Tax, Social Security
What is the definition of a budget that I kept telling you in class?
Telling your money where to go instead of wondering where it went.
Give me 3 examples of common loans that you can take out
Mortgage, Auto, Business, Personal, Student, Payday:(
What are 3 short-term services a bank or credit union can give you?
ATMs, checking/saving account, Check cashing, money order, cashiers check, withdrawal and deposit, credit or debit cards
What's the difference between a 401(k) and an IRA?
IRA is completely on you while a 401(k) is offered through your company