Paycheck
What does a pay stub show you?
A record of your pay including gross income, deductions, and net pay.
What is the main difference between a bank and a credit union?
Banks are for-profit; credit unions are non-profit, member owned.
Name one way to deposit money into a checking account.
Direct deposit, ATM, mobile deposit, bank branch, P2P transfer.
What is a budget?
A written plan showing income and expenses.
What are taxes used for?
To fund government programs and services (infrastructure, education, healthcare, etc.).
What is the difference between gross pay and net pay?
Gross pay is total earned before deductions; net pay is what you take home after deductions.
What type of bank only exists on the internet?
Online banks.
What is the purpose of the memo line on a check?
To note the purpose of the payment.
What does the “50” represent in the 50-30-20 rule?
50% of income goes to needs (housing, food, transportation, utilities, etc.).
What is the deadline for filing income taxes in the U.S.?
April 15 (for the previous year’s income).
Name two common deductions taken out of a paycheck.
Federal taxes, state taxes, FICA (Social Security & Medicare), benefits.
What is overdraft protection and why might it be useful?
It transfers money from savings or credit if your account has insufficient funds; prevents declined transactions (but fees may apply).
What type of endorsement should you use if you want the check to only be deposited into your account?
Restrictive endorsement (“For Deposit Only”).
Give one example of a fixed expense and one of a variable expense.
Fixed = rent, car payment; Variable = groceries, clothing.
What is the difference between a tax deduction and a tax credit?
Deductions reduce taxable income; credits directly reduce the tax owed.
What’s the difference between voluntary and involuntary deductions?
Voluntary are chosen (insurance, retirement); involuntary are required (child support, alimony).
Name two pros and two cons of peer-to-peer payments.
Pros: convenient, trackable, exact amounts, multiple parties. Cons: fees, slower than cash, limits on amounts, possible mistakes.
What is the ABA routing number used for?
To identify the bank and route the transaction.
What does “pay yourself first” mean in budgeting?
Save before spending on other expenses.
At what income amount must someone file a tax return (2024 standard)?
$12,950 or more (with exceptions for refunds, self-employment, etc.).
If an employee earns $15/hour and works 40 hours, what is their gross pay before deductions?
$600
If your ATM card is lost, list two steps you should take to protect your account.
Call the bank immediately, block/freeze the card, change PIN.
Explain the steps for balancing a checkbook and why it’s important.
Record all transactions, compare register with bank statement, adjust for errors; helps avoid overdrafts and catch mistakes.
Why is it important to use net income instead of gross income when creating a budget?
Net income is the money you actually take home after taxes and deductions. Using gross income could make your budget unrealistic, since it doesn’t reflect what you truly have available to spend or save.
Explain how the progressive tax system works in the U.S.
As income increases, higher portions are taxed at higher rates (different brackets).