Budgeting Basics
What is the term for a plan that tracks your income and expenses?
A budget.
What type of account allows frequent deposits and withdrawals?
Checking account.
What does empathy mean?
Understanding and sharing the feelings of another person
What is money set aside for long-term goals or future needs?
Saving.
What is something necessary for survival?
Need.
What is the first step in creating a budget?
Identifying income.
What do banks pay you for keeping your savings with them?
Interest.
What is the score used to determine your creditworthiness?
Credit score.
What type of investment involves putting money in stocks or bonds to make it grow?
Investing.
What is something you would like to have, but it’s not necessary for survival?
Want.
If your income is $2,500 per month and expenses are $2,000, how much money is left?
$500.
What is the main difference between a savings account and a checking account?
A savings account earns interest, while a checking account is for everyday transactions.
What type of loan is paid back in installments?
Installment loan.
What is the account that allows your investments to grow tax-free for retirement?
Roth IRA.
Give an example of a need.
Food, shelter, healthcare
What is money set aside for unexpected expenses?
Emergency fund.
What is a fee that some banks charge if you don’t maintain a minimum balance?
Account maintenance fee.
What happens if you carry a high balance on a credit card?
You accumulate high interest charges.
What type of investment is low-risk and earns a fixed interest rate?
Certificate of Deposit (CD).
Give an example of a want.
Video games, luxury items, designer clothing.
What is the general rule of thumb for savings as a percentage of income?
20%.
What is the maximum amount covered by FDIC insurance in a single bank account?
$250,000.
What is the amount of money you still owe on a loan or credit?
Balance.
What is a financial product that pools your money with other investors to buy stocks and bonds?
Mutual fund.
What is the term for choosing a want over a need?
Opportunity cost.