Bank Accounts
What are the differences between a checking account and a savings account?
According to the 20/30/50 rule, what percent of your take home pay should you be saving?
20%
True or false: You must use physical envelopes and cash to use the envelope budgeting strategy.
False. There are many apps that simulate envelope budgeting digitally.
True or false, the security deposit covers all damages from pets, so pets don't add any costs on your lease.
False. Your lease may charge a pet fee (a one-time, none refundable charge), a pet deposit (additional deposit that gets returned if there is no damage), or even pet rent (monthly rent increase) for having a pet.
You are moving to a city with a great public transportation system. What would be a reason why keeping your car with higher transportation costs?
[Answers may vary]
Ex. Daily commute on public transportation is 1-2 hours long each day.
What is FDIC Insurance?
The FDIC will protect up to $250,000, per account, per person, in the event of a bank failure.
What does it mean to "pay yourself first?"
Deposit money into your savings before spending it on anything else.
What are 2 examples of wants?
[answers may vary]
ex. upgraded phone, dining out
How much money do you need to provide as a security deposit when you sign a lease?
one to two months rent
It’s a good idea to save it for any unexpected car expenses that may come your way.
Your bank provides a statement once per month. Your bank statement includes a list of every transaction and it’s important to review this list for any mistakes. Your bank will also include any changes to the terms of your account on a bank statement.
How much money should you set aside for your emergency fund?
3-6 months of living expenses
What are 3 examples of Needs?
[Answers may vary]
ex: clothes, food, shelter
How much money should you put towards your home's down payment?
20% of the home's value
Darrel lives in Fair Lawn, NJ and works in Manhattan, NYC. He currently drives his car to the city and parks in a garage by his office. What ways would you suggest to Darrel to lower his transportation budget?
[Answers may vary]
Take the train and subways to work instead of driving.
What are overdraft protection, and why is it misleading?
Overdraft protection allows you to spend more money than is in your account. Instead of declining a purchase made without the money in your account, the bank makes your balance negative and charges you a fee.
What are 3 reasons why someone might not be able to save their money?
[Answers may vary]
overspending, having too much debt, not budgeting, not earning enough to cover living expenses, etc.
Determine whether the following expenses are fixed or variable:
1. Your cell phone bill
2. a restaurant
3. Your Netflix subscription
4. An emergency room bill
5. School supplies
Fixed: Your cell phone bill, Your Netflix subscription
Variable: A restaurant, An emergency room bill, School supplies
What are 3 of the 7 important factors that you should consider when choosing where to live?
cost of living, job availability, desirability and happiness, crime, quality o education, commute, quality and availability of healthcare.
What are 4 types of public transportation methods?
[Answers may vary]
Train, bus, subway, ferry, scooter, bike, tram car, cable car.
What is the differences between a CD and a Savings account?
A CD is a timed deposit. You deposit money into an account to earn interest and cannot access it earlier without penalty. A savings account earns interest and can access it while it is there, with restrictions.
What does it mean to "live paycheck to paycheck?"
If you’re living paycheck to paycheck, you might not be making enough money to cover your expenses OR you’re just barely making ends meet. If this is the case, there is no money left over after you’ve paid for basic necessities to save.
Explain, one of the three budgeting strategies that we discussed this year. (20/30/50, Zero balance budgeting, or envelope budgeting)
20/30/50 - 20% of your income goes to savings, 30% goes to your wants, and 50% goes to your needs.
Zero balance budgeting - Every single dollar of your income is assigned to a specific expense, leaving you with a balance of $0.
Envelope Budgeting - You put specific amounts of your money into envelopes (physically with cash, or electronically with an app or spreadsheet) representing different budget categories.
What three requirements should be met before buying a home?
What are 4 costs that you will have to pay within the first year of buying a car?
gas, license and registration fees, insurance, maintenance, monthly payment, repair costs