Banking & Budgeting
This bank account is designed for everyday spending, paying bills, and debit card purchases.
Checking account
This means borrowing money with a promise to repay it later.
Credit
This type of insurance helps cover medical expenses from illness, injuries, and preventive care.
Health insurance
This is the stage of life when someone stops working regularly and relies on savings, benefits, or other income.
Retirement
Someone steals your personal information and opens a credit card in your name. This crime has occurred.
Identity theft
This bank account is designed to hold money for future needs and usually earns interest.
Savings account
This type of interest is earned on both your original savings and previously earned interest.
Compound interest
This federal agency collects federal income taxes.
Internal Revenue Service, or IRS
This employer-sponsored retirement savings plan may include a company match.
401(k)
A fake email pretending to be your bank asks you to click a link and enter your password. This scam is called this.
Phishing
Rent that stays the same each month is this type of expense.
Fixed expense
Missing a credit card payment can cause these two negative consequences.
Late fees and damage to your credit score
This type of insurance provides money to beneficiaries when the insured person dies.
Life insurance
This retirement account uses after-tax contributions and allows qualified withdrawals to be tax-free.
Roth IRA
A person builds a fake online romantic relationship and then asks for money. This is the name of the scam.
Romance scam
You earn $1,800 after taxes. Your monthly expenses total $1,350, and you put $200 into savings. This amount remains available to spend.
$250
You deposit $500 at a 4% annual simple interest rate for two years. This is the total interest earned.
$40: $500 × 0.04 × 2
A tax deduction reduces taxable income. A tax credit directly reduces this.
The amount of tax owed
An employer matches a worker’s 401(k) contributions dollar for dollar, up to $100 each month. If the worker contributes $100, this total amount enters the account that month.
$200: $100 from the worker and $100 from the employer
An investment scheme uses money from new investors to pay earlier investors instead of earning real investment profits.
Ponzi scheme
Following the 50/30/20 budgeting rule, someone earning $2,000 per month would divide their money into these three dollar amounts for needs, wants, and savings.
$1,000 for needs; $600 for wants; $400 for savings
A person has a $300 balance on a credit card with a $1,000 limit. This is their credit utilization percentage.
30%: $300 ÷ $1,000 × 100
In a progressive income tax system, moving into a higher tax bracket means the higher rate applies to this portion of your income.
The income within the higher bracket; the higher rate does not apply to all earnings
Two people contribute the same total amount toward retirement, but one begins years earlier. Explain the financial advantage the earlier saver has.
Their money has more time to grow through compounding, earning returns on earlier earnings.
An unfamiliar account promises to double your money with “zero risk” if you send payment within ten minutes. Identify two warning signs and one safe response.
Warning signs: guaranteed high returns, no-risk claims, pressure to act quickly, or unsolicited contact. Safe response: do not send money; independently verify the offer or report/block the account.