Checking & Savings
True or False: Savings accounts usually earn more interest than checking accounts.
True
What is a budget?
A plan for how to spend and save your money each month.
What is a student loan?
Money borrowed for education that must be repaid with interest.
What is “cost of living”?
The amount of money needed to cover basic expenses in a certain area.
True or False: Investing always guarantees a profit.
False
What is the main purpose of a checking account?
To pay for everyday expenses and access money easily.
What are the three main parts you must fill out on a check?
Date, payee, amount (and signature).
What does “interest rate” mean?
The percentage charged by a lender for borrowing money.
What are two common deductions you might see on a paycheck?
Taxes, Social Security, Medicare, health insurance, retirement, etc.
What is a retirement account?
A savings plan (like a 401(k) or IRA) used to build money for retirement.
What is one key difference between a debit card and a credit card?
Debit takes money directly from your account; credit borrows money you must repay.
What’s the difference between a fixed and a variable expense?
Fixed stays the same monthly (rent); variable changes (food, gas).
Name one way to reduce student loan debt over time.
Make extra payments, refinance, qualify for forgiveness, choose income-based repayment, etc.
What is the difference between gross pay and net pay?
Gross = before deductions; Net = after deductions.
What does it mean to invest in stocks?
Buying shares of ownership in a company.
What is overdraft protection?
A service that covers transactions when your account balance is too low (often with a fee).
If you make $2,000/month and your expenses total $1,500, how much can you save?
$500
If you borrow $10,000 at 5% interest for 10 years, are you paying more or less than $10,000 back?
More — you pay back principal plus interest.
Why might someone move to a different city for a job?
Lower cost of living, higher pay, better opportunities, etc.
What is diversification?
Spreading investments across different assets to reduce risk.
Name one benefit and one drawback of keeping too much money in a checking account.
Benefit: easy access to cash; Drawback: low/no interest earned.
Name two strategies for sticking to a monthly budget.
Tracking expenses, using apps, cutting unnecessary costs, paying yourself first, etc.
What is the difference between a secured and unsecured loan?
Secured has collateral (car/home); unsecured does not (credit card).
How can the cost of living affect your salary negotiations?
Higher cost areas often require higher salaries to maintain the same lifestyle.
Why is starting to save for retirement early important?
Compound interest helps your money grow over time.