Budgeting and Income
What is the difference between a need and a want?
A need is required for basic living; a want is desired but not essential.
What fund helps cover unexpected expenses such as urgent car repairs? Describe one scenario where having an emergency fund protects a person from going into debt. (Reponse Cards)
An emergency fund.
What is collateral? What can happen to collateral if a borrower fails to repay the loan? (Response Cards)
An asset pledged to secure a loan.
What is an insurance premium? Why must policyholders continue paying premiums even if they do not file an insurance claim? (Response Cards)
The amount paid for an insurance policy.
What federal application is used to apply for federal student aid? Why should students complete it even if they aren't sure they will qualify for financial aid? (Response Cards)
FAFSA
A student earns $500 and spends $350. What is the remaining cash and what does a positive cash flow indicate about their spending habits? (response card)
150
What is compound growth? Why does compound growth make saving money over long periods so powerful? (Response Cards)
Earning returns on the original amount and on accumulated returns over time
What does APR stand for, and what does it help borrowers compare? How does comparing APRs help a borrower evaluate different loan options?(Response Cards)
Annual percentage rate; it helps compare borrowing costs
What is an insurance deductible? How does choosing a higher deductible typically impact the cost of your insurance premium? (Response Cards)
The amount the insured generally pays toward a covered loss before insurance pays under the policy.
Name two costs to consider when comparing colleges or training programs. Why is looking at total cost important? (Response Cards)
tuition, fees, books, supplies, housing, transportation, or other program costs.
What is the difference between gross pay and net pay?
Why is net pay the most important figure to use when creating a personal budget? (response cards)
Gross pay is before deductions; net pay is take-home pay after deductions
Name two sources of income during retirement? How do these sources help maintain financial independence after leaving the workforce? (Response Cards)
Any two: Social Security, individual savings, employer-sponsored plans, etc.
How does revolving credit differ from installment credit? Provide one real-world example of each credit type (Response Cards)
Revolving credit can be reused up to a limit; installment credit is repaid on a schedule over a set term.
Name two risk-management strategies. Briefly explain how one of these strategies helps protect an individual financially? (Response Cards)
Avoiding, reducing, retaining, or transferring risk
Name two funding sources for postsecondary education besides student loans. Explain how a student can qualify for one of them. (Response Cards)
Grants, scholarships, work-study, or military programs; any two.
What is it called when you can not have everything due to our limited amount of resources.
Opportunity Cost / Trade-off
Why can starting retirement savings early help build financial security? how time affects overall wealth accumulation? response cards
Savings have more time to grow, including through compound growth.
Name two strategies that can reduce total borrowing costs. Describe two specific strategies a borrower can use to reduce the total amount of interest paid on a loan over time (Response Cards)
Make a larger down payment and/or additional principal payments
What is phishing, and how can someone reduce the risk? State two actions you can take to protect your personal information online (Response Cards)
A scam that tricks people into revealing information or clicking harmful links; verify senders and avoid suspicious links or requests
When comparing renting and buying a home, what should a person evaluate? Mention one major advantage of each option? (Response Cards)
The costs and benefits of owning versus renting housing.
A person has $8,000 in assets and $3,000 in liabilities. What is his net worth, plus how do you calculate net worth? Explain how assets and liabilities interact to determine overall net worth. (Response Cards)
$5,000 (assets minus liabilities).
Name three investment options. Briefly state how risk generally relates to potential financial return? (response cards)
Stocks, bonds, and mutual funds.
What are the three Cs of creditworthiness?
Character, capacity, and collateral.
Name one consumer-protection organization. What services or assistance does this organization provide to consumers? (Response Cards)
Better Business Bureau, Consumer Financial Protection Board or Texas State Securities Board
Name two factors that can help evaluate an education investment. Explain how one factor impacts long-term earning potential? (Response Cards)
Academic reputation, selectivity/rigor, average starting salary in the field, or likelihood of graduation; any two.