Personal Finance
What is Personal Finance?
Personal Finance is the management of a person's individual finances. Personal Finance is Personal!
What is an overdraft?
An overdraft is when you spend money you don't have in your account, and results in being charged a fee?
What is a credit score and what is its range?
A credit score is a number that represents how trustworthy you are when borrowing money.
Range is 300 to 850
What is a share?
A share is a portion of a company that investors can purchase.
What does APR stand for?
Annual Percentage Rate
What is a budget?
A budget is a plan for how you will manage your money over a period of time.
What is online banking?
Managing your bank account through a website or app.
What happens if you only pay the minimum amount each month when you receive your credit card statement?
If you only pay the minimum amount you will end up paying more in interest because it will take a longer amount of time to pay the debt off fully.
What does diversification mean when talking about investments?
Spreading investments across different assets to reduce risk.
What is the difference between fixed and variable expenses?
Fixed Expenses stay the same each month. (Rent)
Variable Expenses change each month. (Entertainment)
Name 3 budgeting strategies.
50/20/30
Zero-balance
Pay Yourself First
Envelope
What is direct deposit?
When your paycheck is automatically deposited into your bank account.
What is armorization?
The paying off of debt on a fixed repayment schedule in regular installments over a period of time?
What is return on investment (ROI)?
The profit or loss made from an investment.
Explain compound interest and why you would want to have a high interest rate?
Compound interest is interest earned on the original amount plus the interest already earned.
The higher the interest rate the faster your money will grow.
What is an emergency fund and how much should be in it?
An emergency fund is a savings account where people keep money for an emergency such as a car repair.
You should start by building a $1000 emergency fund and then add until you have enough money to cover 3 to 6 months of your expenses.
What do the terms unbanked and underbanked mean?
Unbanked is when a person does not have a banking institution, usually because they do not trust banks.
Underbanked is when a person has limited banking options located near them.
What is the difference in a bear and bull market?
A bear market is when stock prices fall, often signaling a weak economy.
A bull market is when stock prices rise, often signaling a strong economy.
What does risk tolerance mean?
Risk tolerance is how comfortable a person is with risking their money in the stock market, which can be unpredictable.
What is FDIC insurance?
Government protection that insures bank deposits up to $250,000 if the bank fails.
What is the purpose of retirement planning in personal finance?
To ensure a financially secure retirement and future.
What is a routing number and an account number?
A routing number is used for things like direct deposit, this number is specific to your banking institution.
An account number is a number given to each personal or business account open at a banking institution and is unique to each account.
What is the difference between your credit history and your credit report?
DOUBLE YOUR POINTS!
Give me a detailed list of what your credit report contains.
Your credit history is a summary of your accounts and payments. It is one of the factors in determining your credit score.
Your credit report is also a summary of your accounts and payments, but also includes other types of information. It is not a factor in determining your credit score. It will tell you information about who you have gotten credit from and owe, but it does not tell you your credit score. You can request a free copy once per year from the 3 major credit reporting agencies.
What is the formula to figure out your current stocks to bonds ratio for your investment portfolio?
100 - your age = % of Stocks to Bonds you should have in your investment portfolio.
What are the 3 major credit reporting agencies?
Equifax
Experian
Transunion