Earning
What does "earning" mean?
Money you make from work and things you own.
What is a checking account?
A checking account is a bank account you use to move money, pay for expenses, and pay down debt (if any).
What are investments?
Accounts and assets you use for long-term goals and growing your personal wealth.
What is a savings account?
An account you use to save money.
What are liabilities?
Liabilities include any money you owe.
What is another way to say, "Earning?"
Income
True or False: We should keep the money we want to save inside our checking account.
False! We want to move our money into a savings account if the goal is to save it.
What are assets?
Assets are thing you own. They include your money and other items you could exchange for money. For example: your house, car, jewelry, investments and more.
Why do we need a savings account?
To save money for emergencies and goals or events within one year.
Another way to say "liabilities" is...
Debt!
What are three types of income?
The types of income are:
1. Salary/Wages & Bonuses
2. Rental Income
3. Interests & Dividends
True or False: I pay my bills with my checking account.
True!
There are many types of investments. What are three that are the most popular?
1. Retirement Accounts
2. Real Estate
3. Stocks, bonds.
How much of my income should I save?
Typically 10-30% of our overall income should be for savings and investments.
What are three common forms of liabilities?
2. Mortgage
3. Student Loans
From where do the majority of people make their money?
From their job!
True or False: All of my income goes through my checking account.
True. Think of your checking account as the headquarters for your money. All of your money should go through your checking account, and from there, you move it into your savings account and investment accounts.
True or False: I should start thinking about investing at an early age.
True! The sooner we start investing, the more our money works for us.
What are "savings goals?"
This can be anything you think you need or that excites you: a car, electronics, a trip to Europe, furniture, gifts, pets, and big life events!
True or False: The amount of "fun" spending I have should be less than the amount I set aside for savings and investments.
True! Remember the Pay Yourself First model. The future you will thank you for working hard to save and invest while you're young!
What are some other ways to make money besides your job?
Interest and investment income, dividends, and rental income.
True or False: I fund my savings and investment accounts with the money from my checking account?
True!
True or False: If my goals are longer than one year, I should move my money into investments.
True! Savings are typically for emergencies or goals that can be achieved within a year. If it's longer, your money works better for you if they are in investments.
True or False: The money I put in a savings account earns interests.
True! This means your money grows without you needing to do anything. Granted, it does take some time, but your money works for you!
What is "spending?"