Values, Needs, Wants, & Goals
Explain the idea of "keeping up with the Jones'". Give an example.
to show that one is as good as other people by getting what they have and doing what they do. people trying to keep up with the Joneses by buying expensive cars and clothes that they can't afford.
What is opportunity cost? Give an example of this.
Opportunity Cost-the decision to buy one thing impacts your ability to buy something else. -The loss of potential gain from other alternatives when one alternative is chosen.
Ex: Choosing college over going straight to work after high school.
How much is recommended that one keeps in their saving account during any given period of time?
What is the definition of bankruptcy? How can bankruptcy affect a person?
Bankruptcy: A legal process to get out of debt when you can no longer make all your required payment.
Influences financial freedom
Limits choices
Pay more for credit
Other people absorb your debt
What is the difference between an insurance premium and deductible?
A Premium is a payment to the insurance company for an insurance policy
A deductible is the amount of money an insured person pays before the insurance company makes payments for loss
Define wants and needs. Give examples of each.
Needs: something required to sustain life (water, food, air, housing, clothing)
What is a W-4 tax form? What is a W-2 tax form? What is an I-9 form?
W-4: Tax form you fill out so your employer can withhold the correct federal income tax from your pay.
W-2: Tax form that contains a summary of the income earned and the amount of taxes withheld during the prior tax year. Employees use this statement to fill out their tax returns.
I-9: Used to verify the identity and employment authorization of individuals hired for employment in the United States.
Why is it important to comparison shop? What is delayed gratification? Give examples.
Save money! Better quality products! Delayed gratification is putting off something desired now for something greater or of more value in the future. Ex: Studying for a test instead of scrolling reels on social media.
What are the 5 C's of credit worthiness? (What things do the banks look at when determining whether to loan you money?)
Character, Capacity, Capital, Collateral, & Conditions
What does FAFSA stand for and what is it used for?
Free Application for Federal Student Aid. It is used to tell the federal government you are interested or in need of federal financial assistance to pay for higher education.
Describe the role of finances (money) has on a person's emotional, cultural, and social health? How can your cultural background or social situations influence how you manage your money?
Thoughts? Stress? Divorce? Stability?
What is it called when we calculate the amount of time it takes to double money in an investment situation?
The Rule of 72.
Name 3 ways one can pay for college? What are the benefits of a college education?
Scholarships, Grants, Loans, Family Contribution, Personal Savings
Benefits: higher earnings, increased job opportunities, job security, increased self esteem, networking possibilities
What is the price of money called? (Hint-When we borrow money, we want this to be low. When we invest money, we want this to be high.)
Interest
Name one financial scheme and 2 ways to avoid/protect yourself against schemes/scams?
Affinity fraud, ponzi schemes, pyramid scheme.
Don’t become a victim. Investigate strangers who have deals too good to be true. Always stay in charge of your money. Don’t be fooled by appearances. Watch out for salespeople who prey on fears. Monitor your investments. Report fraud or abuse. Do your homework. Be wary of door-to-door solicitations. Shred Financial Documents.
Define goals. Short-term & Long-term. What role does goal making have in the financial success of an individual?
Goal – the end result of something a person intends to acquire, achieve, do, reach, or accomplish sometime in the near or distant future
What is the difference between saving and investing?
Saving: Portion of current income not spent on consumption. (Securing current money-avoiding debt).
Investing: Purchase of assets with the goal of increasing future income. (Developing long term wealth).
Name 2 different budget methods. What percentage of your money is recommended to go in each category of spending?
Envelope & Electronic. 70-20-10 or 60-20-10-10.
60-Consumption
20-Saving
10-Investments
10-Charitable Contributions
What is the purpose/role of credit? Why is it important to build and maintain a healthy credit rating?
Good credit can provide individuals with opportunities to make bigger purchases such as real estate, cars, and/or business ventures. Bad credit can limit these options and make financial progression very difficult.
Name 2 pros to homeownership. Name 2 cons to homeownership. Name 2 pros to renting. Name 2 cons to renting.
See slides.
Explain the law of supply and demand? Why is this important to understand as a consumer? Give an example of this.
Supply – How much is made
Demand – How much is requested
Factors of Production/Resources – inputs to produce goods or services (land, labor, capital)
What components should you include on your professional resume?
Skills, certificates obtained, accomplishments, education, experience, contact information, & references.
What are the 3 different depository institutions we learned about (compared) in class this semester? Name the insurance(s) that comes with a majority of bank accounts at these institutions.
Commercial banks, credit unions, and online savings accounts.
NCUA
FDIC
What are 5 things that affect your credit score?
Payment history, outstanding debt, length of credit history, pursuit of new credit, & types of credit in use.
Name 3 different types of insurance. Why is insurance important in protecting the wealth and potential debt of a person?
Auto, home, disability, life, renters, health insurance. Examples of importance?