Financial Literacy
The use of knowledge and skills for earning, saving, spending, and investing money to achieve personal, family, and community goals.
Financial literacy
What is the purpose of insurance?
transfer risk and provide financial protection
Allows you to transfer money to pay expenses and for other business activities
Payment service
What is Inflation
the overall level of prices in the economy
True or False: You need a credit card to have credit.
False
What is a Financial Plan
Document summarizes your current financial situation and recommends future financial activities
What is a deductible in an insurance policy?
the amount you pay out of pocket before insurance coverage kicks in
Name at least two things you consider when comparing financial service providers.
1. Fees 2. Services offered 3. Accessibility 4. Reputation and reviews 5. Technology and digital tools
What is the economic principle that refers to the trade-off when making financial decisions?
Opportunity Costs
Finance a specific purchase for a specific amount of time. Regular monthly payments made to the interest first, then the principal
Installments
What are the stages in the family situation and financial needs of an adult called?
Adult Life Cycle
Name one type of auto insurance coverage required by most states.
Liability
What are wireless transactions and their perks?
Wireless transactions, such as cardless ATM access and in-store purchases, will likely reduce debit and credit card purchases.
What form do you need to obtain for an automatic 6 month extension if you're unable to file your federal income tax return on time?
Form 4868
What are some disadvantages of credit cards? Name at least 2.
1. Temptation to overspend 2. Failure to repay may result in loss of income, valuable property, your good reputation, and/or lead to bankruptcy 3. Ties up future income 4. More costly over time
How do you calculate interest?
Rate × Period ×Amount per Period
What is the difference between term insurance and whole life insurance?
term insurance provides coverage for a specific period, while whole life insurance covers you for your entire life
Common saving rule and 20 help plan for unexpected expenses
What are the two things that can affect your filing status?
Martial status and dependents
What is the Debt-to-Income Ratio. Give Example
The percentage of your income that goes toward debt payments
What is the different between APR and APY? Why do they matter?
One is yield, and the other is rate. Rate is what you pay on loans and credit, while yield is the money you earn from your savings and investments. The higher the yield, the better because your money grows faster over time.
When shopping for renter’s insurance, what coverage features should you look for?
Most experts recommend that the policy cover your personal belongings and provide funds for living expenses if you’re dispossessed by a fire or other disaster.
How many non-deposit types of financial institutions are there? What are they?
There are a total of six: 1. Life insurance companies 2. Investment companies 3. Brokerage firms 4. Credit card companies 5. Finance companies 6. Mortgage companies
How can economic conditions affect personal financial decisions?
What is through impacts on interest rates, job availability, and consumer confidence?
What are 5 things you can do to improve your credit score?
1.Get copies of your credit report and verify the information. 2.Pay your bills on time. 3.Understand how your credit score is determined. 4.Learn the legal steps to take to improve your credit report. 5.Beware of credit-repair scams.