Paycheck Breakdown
This is the total amount you earn before taxes and other deductions are taken out
What is gross pay
True or False: Being a full-time student automatically means you do not have to worry about federal taxes
What is False
This free application is used in the federal student-aid process and can help determine eligibility for financial aid
What is the FAFSA
The amount you regularly pay to maintain insurance coverage
What is a premium
This auto coverage generally helps pay for injuries or property damage you cause to other people
What is liability coverage
Mia's first paycheck is smaller than the number of hours worked × hourly wage. What's the most likely big-picture explanation
Taxes and other deductions were taken from her gross pay, resulting in lower net pay
This is the amount of your paycheck you actually take home after deductions
What is net pay
A person whom another taxpayer may be eligible to claim on their tax return is called this
What is a dependent
These two forms of financial aid generally do not need to be repaid when their requirements are met
What are scholarships and grants
The amount you may have to pay toward a covered loss before the insurer pays according to the policy
What is a deductible
You hit a pole and damage your own vehicle. This is the type of auto coverage you would generally look to first
What is collision coverage
Devon can afford a student-loan payment but chooses a repayment strategy that dramatically extends the loan. What financial tradeoff should Devon consider
A lower monthly payment can mean repaying for longer and potentially paying more interest overall
This document shows your earnings, deductions, taxes, net pay, and year-to-date totals
What is a pay stub
Income received from working at a job is generally classified as this type of income
What is earned income
This type of financial aid must generally be repaid, usually with interest
What is a student loan
A request made to an insurance company for coverage/payment after a loss
What is a claim
A tree falls on your parked vehicle during a storm. This type of auto coverage would generally be relevant
What is comprehensive coverage
A college advertises a $20,000 scholarship. What number should a student care about more than the scholarship amount itself
The remaining/net cost of attending the college
Money taken from a paycheck and sent toward a worker's federal income tax obligation is called this
What is federal income-tax withholding
Money returned to a taxpayer when they have paid more through withholding than they ultimately owe may result in this
What is a tax refund
Put these in the generally preferable order when paying for college: private loans, scholarships/grants, federal student loans
What is Scholarships/grants → federal student loans → private loans
The maximum amount an insurance policy will pay for a covered loss or category, subject to the policy's terms
What is a coverage limit
Your landlord has insurance on the apartment building. Why might you still want your own renters insurance
The landlord's insurance does not automatically protect the tenant's personal belongings or personal liability
Jordan chooses a $1,000 insurance deductible instead of $250 because it lowers his premium. What financial risk is Jordan accepting
He must be prepared to pay more out of pocket if a covered loss occurs
Social Security and Medicare are commonly associated with this broad category of taxes deducted from workers' paychecks
What are payroll taxes
Money you receive from sources other than working at a job, such as certain investment earnings, falls into this broad category
What is unearned income
A college offers you a $15,000 scholarship while another offers you only $8,000. Why shouldn't you automatically choose the first college
You need to compare the actual/net cost or remaining cost, not simply the size of the scholarship
A loss, situation, or item that an insurance policy specifically says it does not cover
What is an exclusion
Besides protecting belongings, renters and homeowners policies can provide this protection if you are legally responsible for certain injuries or property damage to someone else
What is personal liability coverage
Jordan owns $7,000 worth of belongings but says, “I rent, so my landlord's insurance has me covered.” What misunderstanding does Jordan have
The landlord generally insures the building, while Jordan needs to consider renters insurance for his own belongings/liability
Two workers both earn $20 per hour. One works 40 hours and the other works 30 hours. Before looking at any taxes or deductions, which part of their paychecks will already be different, and why
What is gross pay, because they worked a different number of hours
True or False: If your parents can claim you as a dependent, you can never be required to file your own tax return
What is False. Dependent status and your own filing requirement are separate issues
College A costs more per year but offers more financial aid. College B has a lower sticker price but offers less aid. What should you compare before deciding which school is actually more affordable
What is the amount you would actually have to pay/finance after financial aid
Two auto policies provide similar coverage. Policy A has a $250 deductible and Policy B has a $1,000 deductible. All else equal, which policy would you generally expect to have the lower premium
What is Policy B / the policy with the higher deductible
Your car is damaged by hail while sitting in a parking lot. Which major type of auto coverage would you generally look to first
What is comprehensive coverage
A student chooses the cheapest insurance policy, the lowest student-loan payment, and the college offering the biggest scholarship. What mistake is the student making in all three decisions
What is focusing on one attractive number instead of considering the total cost, risk, and tradeoffs