Budgeting
A budget is only for people who don’t make much money.
False
Money in a savings account grows faster than most investments over 10 years.
Using a credit card responsibly can help build your credit score.
True
Your first job always defines your lifelong income.
False
Impulse purchases don’t affect your financial health.
False
Name two fixed monthly expenses everyone typically has.
Rent/mortgage, utilities, phone, insurance, etc.
Name two benefits of having an emergency fund
Covers unexpected expenses, reduces debt risk, peace of mind
What’s a minimum monthly payment?
The smallest amount you can pay to keep your account in good standing
What are two sources of income for students?
Part-time job, allowance, freelance work, scholarships with stipend
Name two types of financial aid besides grants.
Scholarships, loans, work-study
You earn $1,500 a month. Rent = $600, Food = $200 Transportation = $100. How much is left for savings and fun?
$600
What is compound interest?
Interest earned on both the original amount and accumulated interest
Name one danger of high-interest loans.
Debt grows quickly, can become unmanageable
What’s the difference between gross and net pay?
Gross = total income before deductions; Net = income after deductions
What is the difference between a grant and a loan?
Grant = free money, Loan = must be repaid
List three strategies to reduce discretionary spending.
Track expenses, meal prep, cancel unused subscriptions, comparison shop
Which is generally riskier: a savings account or the stock market?
Stock market
If a credit card has 20% APR and you carry a $1,000 balance for a year, approximately how much interest will you pay?
$200
Name one benefit and one drawback of working during school.
Benefit = extra income, experience; Drawback = less free time, stress
What factors affect how much financial aid a student can receive?
Family income, number of family members in college, FAFSA info
Create a mini-budget for someone earning $2,000/month with 50% needs, 30% wants, 20% savings.
Needs = $1,000, Wants = $600, Savings = $400
If you invest $1,000 at 5% annual interest, compounded annually, how much will you have in 3 years?
$1,157.63
Explain why paying only the minimum on a credit card balance is costly over time.
Interest accumulates, balance takes longer to pay off
Explain how career choice affects long-term financial goals.
Salary, benefits, growth opportunities impact savings, lifestyle, debt repayment
Discuss a situation where taking on a loan might be a smart decision.
Investing in education, buying a home with manageable payments, starting a business