Improve Financial Health
What is the formula for net worth?
Assets- liabilities
What is a HYSA?
Hied Yield Savings Account
If someone is just starting their finance journey, what do you recommend is the first step?
Build a 3-6 month emergency fund, yes even before paying off debt
Describe a high yield savings account
higher APY than typical bank accounts
What does IRA stand for?
Individual Retirement Account
Describe "good" vs. "bad" debt
Good debt is below 7% (school)
Bad debt is anything above 7% (credit)
What does APY stand for?
Annual percentage yield
At what stage should someone start investing in their 401K?
After building an emergency fund and paying off bad debt (anything above 7%)
What are the 5 factors that make up your credit score?
1. The length of history
2. Credit utilization (under 30%)
3. Payment history
4. Recent applications
5. Mix of credit types
What does CD stand for?
Certificate of deposit
Why is it recommended to invest in your 401K before an IRA?
Typically because there is a free match donated to the 401K
What is amortization?
The process of spreading out a loan into a series of fixed, equal payments over time.