How the banks work
Hodge Podge #1
Hodge Podge #1
This is a financial institution that accepts deposits from the public, provides financial services like loans, credit cards, etc.
A Bank
What is one benefit of financial literacy?
Less debt, higher net worth, less financial struggle, improved household finances, better idea of your financial wellness, better credit, etc (Examples may vary)
If you pay a bill late, your creditor can not report this information to a credit bureau. True or False
False - making late payments can lower your credit score because it hints at financial difficulty by the borrower
Lauren pays for her book at the bookstore. She uses a card that can only be used at a specific store and it has a pre-loaded balance.
A gift card
A document that orders a financial institution to pay a specific amount from the issuer's account to the person or organization named.
A check
Something that is borrowed; a sum of money that is expected to be paid back, WITH interest.
A Loan
An exchange of goods or services, between a buyer and seller, usually for money (HINT: 3-syllable word)
Transaction
All of these are examples of financial responsibility except...
Bolin pays for a chocolate bar at the convenience store with cash. The chocolate bar costs $2.50. There is a 8% tax on good like these. What is the total cost of the chocolate bar?
$2.50 x 0.08 = $0.20
$2.50+0.20 = $2.70
The total cost of the chocolate bar is $2.70.
1) Purchasing a new backpack for school (expense or income)
2) Getting a weekly $35 allowance for doing chores around the house (expense or income)
3) Buying Regino's pizza for $5.00 for lunch (expense or income)
1) expense
2) income
3) expense
A card issued by a BANK, that allows the holder to transfer money electronically from their bank account when making a purchase.
Debit Card
(Not to be confused with a credit card)
Name one way to pay for college?
Student loan, personal loan, personal savings/out-of-pocket, scholarships, grants, etc. (Examples will vary.)
Adan really wants the new PS5, which costs $500. Adan has $200.00 in his Bank of Walsh. However, he just received a credit card with a $1000 limit. Should Adan use his credit card to buy a PS5? Why or why not? (Answers may vary)
NO, this is not the "best" decision!
Adan should not use his credit card because he does not have enough money in his checking account to pay off his credit card bill, at the end of the month. He should save a little longer to pay more of the item in cash. If he uses his credit card, he could end up paying interest on the outstanding balance owed on his credit card.
Good credit allows you to pay ________ amounts of interest.
smaller
A common cause of financial difficulties is:
A. poor money management habits
B. a need for additional career training
C. preparing your tax return late
D. not having enough life insurance
A. poor money management habits
I have enough money to pay the balance of my credit card, but I just pay the minimum monthly payment. Is that the best financial decision? True or False
*False*
Paying the minimum amount is not ideal. A person is charged interest when their credit card balance is not $0 by the end of their billing cycle.
A payday loan is a (short/long)-term loan that can help you cover immediate cash needs until you get your next paycheck. These (small/high)-dollar, (low/high)-cost loans usually charge (single/double/triple)-digit interest rates (APRs).
A payday loan is a SHORT-term loan that can help you cover immediate cash needs until you get your next paycheck. These SMALL-dollar, HIGH-cost loans usually charge TRIPLE-digit interest rates (APRs).
Name 2 banking institutions in your neighborhood
Chase, Regions, Bank of America, Wells Fargo, First Convenience, BBVA, Capital One, etc. (Examples will vary.)
If you make $500 each week and there are 4 weeks in the month, how much do you earn each month? Your expenses are $1300 each month. How much does this leave you per week, for additional spending or to put into savings?
$500 X 4 = $2000
$2000 - $1300 = $700
$700 / 4 = $175
I have $175 remaining for additional spending or to put into savings, per week
When you take money out of your bank account.
Withdrawal
List ONE example of a good and ONE example of a service.
Goods are items that are usually (but not always) tangible. (Examples will vary.)
Services are activities provided by other people. (Examples will vary.)
Suppose you have $100 dollars in a savings account earning 2% simple interest a year. After 5 years, how much interest earnings would you have?
$100 x 0.02 x 5 = $10
What should your credit card balance be (by the end of the month) to avoid interest charges?
It should be $0.00 by the end of the month.
A plan for earning and spending over a period of time is called a ______.
budget
Name the different forms of taxes collected in the United States. (hint - there are 3 different types).
1) Income tax
2) Sales tax
3) Property tax