Random
What is an overdraft fee?
A fee charged when you spend more money than you have in your checking account.
True or False — Savings accounts are meant for daily spending.
False
What is the difference between a need and a want?
A need is essential (food, shelter, clothing); a want is something extra.
What is income?
Money you receive, such as a paycheck or allowance.
Why might someone keep some money in a checking account and some in a savings account instead of putting it all in savings?
Checking provides liquidity for daily expenses, while savings earns interest and reduces temptation to spend.
What is the primary difference between an index fund and a stock?
A stock represents ownership in one single company, while an index fund is a collection of many companies bundled together into one investment.
True or False — High-interest debt can prevent you from reaching financial goals.
True
Why is comparison shopping important?
A: It helps you compare price, quality, and return policies to get the best value.
Why is it important to budget for emergencies?
Unexpected expenses happen, and savings prevent debt or financial stress.
What do the following letters stand for in the formula for interest? I=PRT
I: Interest P: Principal R: Rate T: Time
What is the primary difference between a 401k and a Roth IRA?
401(k): You usually contribute pre-tax money (taxes later when you withdraw in retirement).
Roth IRA: You contribute after-tax money (no taxes when you withdraw in retirement).
True or False — Missing the tax deadline can result in fines.
TRUE
When reading reviews, what should you look for instead of trusting just one comment?
Patterns in reviews (multiple people mentioning the same problem or benefit).
What is the 50/20/30 rule?
50% needs, 20% savings, 30% wants.
How does insurance reduce financial risk?
You pay a premium, and if something unexpected happens, the insurance company helps cover large costs.
Why might someone choose a Certificate of Deposit (CD) instead of a regular savings account?
CDs often offer higher interest but require you to leave the money untouched for a set time.
True or False — Checking accounts usually earn more interest than savings accounts.
FALSE
Name two basic consumer rights.
The right to be informed, the right to safety, and the right to choose.
Why might someone choose to pay off a credit card with a high interest rate before saving for a new gadget?
Because interest on debt compounds faster than most short-term savings growth, so paying debt first saves money overall.
P: $2,400 R: 6% T: 20 Years. Find Interest.
$2,880.00
What does it mean when a stock is volatile?
It means the stock’s price moves up and down quickly and unpredictably over a short period of time.
True or False — A tax credit lowers your taxable income, while a tax deduction directly reduces the amount of taxes you owe.
False.
(Explanation: A tax deduction lowers taxable income, while a tax credit reduces the amount you owe.)
A website offers a deal that seems “too good to be true.” What are two smart steps you should take before buying?
Check for secure “https,” research the seller, avoid sharing personal information, and verify reviews.
If two friends earn the same income, but one consistently saves 10% and the other invests 10% in a diversified portfolio, how might their financial situations differ after 10 years, and why?
The friend who invests in a diversified portfolio may have more wealth after 10 years because investments can grow with interest, dividends, and market gains, while simple savings grows slower due to minimal interest. This shows the impact of compound growth and risk-adjusted returns over time.
How can monitoring a checking account balance prevent more than just overdraft fees?
It helps detect errors, fraud, or unauthorized transactions, protecting financial health.