Budgeting
A budget should be based on this type of income, not the amount before taxes.
net income
Which financial institution is owned by its members instead of shareholders?
credit union
Money entering your checking account is called a ______.
Credit
Which savings account usually earns the highest guaranteed interest?
Certificate of Deposit (CD)
Emma has $400.
She gets paid every Friday.
She wants to save for prom while still being able to access her money.
Which account?
Savings Account
According to the 50/30/20 rule, this percentage of your income should go toward needs.
50%
Which government agency insures money in banks?
FDIC
What part of a check is the official legal amount?
The Written Amount
Which account would be BEST for someone who has $30,000 saved but still needs emergency access?
Money Market Account
Marcus has $45,000.
He doesn't need the money for 6 years.
Which account?
Certificate of Deposit
You receive a paycheck of $2,500. Rent is $900, groceries are $350, gas is $150, entertainment is $250, and savings is $300.
Do you currently have a budget surplus or deficit?
Surplus
A company wants help selling stock to raise money.
Which type of bank would they use?
Investment Bank
Your account has $25.
You buy lunch for $31.
You do NOT have overdraft protection.
What happens?
Transaction is declined (or insufficient funds)
Simple Interest or Compound Interest?
Interest is earned on previously earned interest.
Compound Interest
Your friend says:
"I'm going to budget using my gross income."
Why is this a bad idea?
Gross income isn't what you actually receive after taxes and deductions.
Sarah receives an extra $150 after paying all of her bills. In a zero-based budget, what should she do with the extra money?
Assign it to a budget category (such as savings or debt) so every dollar has a job.
You want the lowest fees and better savings rates.
Which institution would probably be best?
Credit Union
Name four ways money can leave a checking account.
ATM
Debit card
Check
Bill Pay
Transfer
P2P
Two people invest $10,000.
Both earn 8%.
One starts at 20 years old.
One starts at 35.
Who has more money at retirement?
Why?
The person who started at 20 because compound interest has more time to grow.
Which account is MOST liquid?
A
Savings
B
Checking
C
Money Market
D
CD
Checking
Name three fixed expenses and three variable expenses.
Fixed:
Variable:
Name two advantages and two disadvantages of online banks.
Advantages
Disadvantages
Balance
Starting:
$700
Deposit
+$400
Gas
-$60
Rent
-$450
Groceries
-$110
Paycheck
+$550
Netflix
-$18
Final Balance?
$1,012