Savings/Budget
What is an emergency fund?
Money set aside for emergency (when you have no more other money)
What is a credit score?
A number that shows how trustworthy you are with borrowing and paying back money
What is retirement?
When someone stops working full-time, usually after age 60-67
What is a loan?
Money you borrow that you must pay back with interest
What are taxes?
Money that people and business pay to the government to fund public services like schools, road, and healthcare
How many months of expenses do experts recommend saving in an emergency savings account?
3-6 months
What is one way to build good credit?
What is 401(k)?
A retirement savings plan offered by employers where you can invest money before taxes
What is the difference between a grant and a loan?
A grant is free money you don't repay; a loan must be paid back
What is sales tax, and when do you pay it?
A tax added to the price of things you buy, paid at the time of purchase
If you make $2,000 a month, how much should you save if you follow the 50/30/20 rule?
You have a $1,000 credit limit and you've spent $300. What's your credit utilization?
30%
What is social security?
You take out a mortgage for $250,000 at a 5% interest rate. What are you actually paying for each month?
Part of the loan amount (principal) plus interest
What is income tax?
A percentage of the money you earn that goes to the government, usually taken out of your paycheck
You get paid $500 every two weeks. You want to save 10% of each paycheck. How much will you save each month?
$50 x 2 = $100/month
Is it better to pay the minimum balance or the full balance each month and why?
Full balance, to avoid paying interest and improve your credit score
Your company offers to match 5% of your 401(k). What happens if you don't contribute?
Your credit score drops, you may owe late fees, and the lender can repossess the car
You notice "Social Security" and "Medicare" deductions on your paycheck. What are they used for?
Why is it better to "pay yourself first" instead of saving whatever is left over?
Because if you save first, you make sure your goals are met before you spend money on extras
How could having no credit score hurt you?
You might get denied loans or pay higher rates because lenders can't see your credit history
Compound interest grows your money faster the earlier you start
Why might someone choose not to take out a payday loan, even if they need quick cash?
Payday loans have extremely high interest rates and can trap you in debt
Some people have moral or religious concerns about how certain tax dollars are spent. What are some examples of this, and how might someone respond if they disagree with how their taxes are used?
Possible answers include objections to funding war, certain medical procedures, or government programs; people may respond by voting, advocating for policy change, or support organizations that align with their values.