Saving & Budgeting
What is the monthly plan for how you are going to save and spend your income?
Budget
What federal agency is the main enforcer of consumer protection laws?
FTC / Federal Trade Commission
What word describes payment for work usually calculated by the hour?
Wages
What is credit in the context of personal finance?
The granting of a loan and creation of debt.
What is the total value of a person’s assets minus their liabilities?
Net Worth
What is product placement? Give one place you might see it.
Product placement = paid display of specific products in movies/TV/media.
What is the difference between salary and wages?
Salary is periodic payment usually for a set period (weekly/monthly/annual); wages are pay based on hours worked.
What does “interest” mean when you borrow money?
Interest is the charge for borrowing money, usually a percentage of the loan.
What term describes interest paid only on the principal amount of an investment?
Simple Interest
What is an impulse purchase? Name one common cause.
Product placement = paid display of specific products in movies/TV/media (example: a soda brand shown in a film).
Define entrepreneur.
A person who starts and runs a business and assumes its risks.
Define compound interest in one sentence.
Compound interest = interest paid on the initial investment and on interest previously earned.
Define “scarcity” in one sentence.
Scarcity: Limited resources but unlimited wants.
What does “bait and switch” mean in advertising?
Advertising a lower priced item to lure customers in, then offering a more expensive item.
What is passive income? Give one example.
Income earned from assets you own (example: rent from property or royalties from a book).
What is portfolio income? Give one source of portfolio income.
Income from investments such as interest, dividends, or gains when you sell an investment for more than you paid. Example: dividends from stocks.
Explain the difference between an asset and a liability and give one example of each.
Asset = anything of value owned (example: house). Liability = anything owed (example: car loan).
Describe two incentives companies use to encourage purchases and explain how each might influence a buyer.
Examples: coupons (discounts that lower price), special offers/limited-time deals (create urgency); both can increase perceived value or urgency to buy.
Explain what withholding is and why it affects take-home pay.
Withholding is the portion of wages deducted for taxes and benefits before pay; it reduces take-home pay
Explain how investments can increase net worth — include role of profit and risk in your answer.
Investments can raise net worth by increasing assets (profit when investments grow in value); higher potential returns often come with higher risk, which can also reduce net worth if investments lose value.