Personal Finance Breakdown
What is an emergency fund, and how long should it typically last?
An emergency fund is a pool of money that someone saves SPECIFICALLY for emergency use. It's purpose is to serve as a reserve if something catastrophic happens, like a huge medical bill or unemployment for a long stretch of time. Ideally, your emergency fund should be 3-6 months of your living expenses - including rent, utilities, food, and transportation.
True or False: Salary Jobs guarantee consistent pay while hourly positions depend on how long you work.
TRUE! Salaried jobs pay you for the work you are doing directly at a fixed rate per pay period. Hourly jobs pay you by the hour depending directly on how long you work.
What does PTO Stand for and what do you use it for?
PTO stands for Paid Time Off. It is when an employee (usually at a salaried job) requests time off in advance where they will not be working, either for part or all of a scheduled work day. If approved, the employee will not work for that day and will still be paid their appropriate pay without any deductions.
What is an employer matching program for retirement?
An employer match is when you contribute a percentage (anywhere from 1-5% typically) to your employer-sponsored 401k/403b plan, and your employer "matches" a certain amount as a benefit. This means you get 'free' money toward retirement (though you can't touch it for awhile).
There are many plans or rules for budgeting. What's the 50/30/20 rule?
50% of your budget goes to your needs
30% of your budget goes to your wants
20% of your budget goes to savings
True or False: Hourly jobs are more likely to have overtime pay than salary jobs.
TRUE! Hourly jobs generally begin to pay 1.5x your hourly rate after 40 hours of work. Salaried jobs do not usually carry this benefit.
Name the type of leave a job might offer you if you are expecting a child.
What's the main difference between a 401(k) plan and a 403(b) plan?
These plans are roughly the same, the only difference is that 401k's are offered at for-profit organizations and 403b is offered at nonprofit or government organizations.
401k and 403b refer to tax loopholes that allow these plans to enjoy tax benefits not offered to usual investment plans.
What is lifestyle creep, and why is it dangerous for your finances?
Lifestyle creep is the phenomenon where once someone starts making more money than they used to have, they begin to spend more of it on discretionary spending and, most times in small ways, increasing what their "baseline" costs are.
Example: someone getting used to buying lunch 3x a week when they used to only buy lunch once a week.
Lifestyle creep is dangerous because once you start to spend on things, it's harder to adjust to not having them once again. If you've heard the phrase "Live Below Your Means", you've heard the direct advice to counter lifestyle creep": don't spend all of the money you earn.
True or false: Hourly jobs are more likely to make demands of you outside of your explicit working hours.
FALSE! Hourly jobs *might* ask you to come in during unscheduled shifts, but they should always compensate you for that time. Salaried workers, on the other hand, might be asked to complete time-sensitive tasks with no additional pay.
Out of 4, name 2 major components of health insurance benefits.
Answers include: Primary Healthcare, Vision Insurance, Dental Insurance, Therapy Benefits.
In 2025, what's the average amount (to the nearest thousand) needed to retire comfortable at age 65-67?
What is credit, how can you build it, and how can you repair bad credit?
Credit is an indicator of your past ability to pay debts fully, on-time, and regularly. This includes credit cards, private or federal loans, and sometimes utility payments. Credit helps places like car dealerships or even landlords to determine if you have "credit-worthiness" and are trustworthy to lend money (or an asset) to.
You can build it by consistently paying your bills on-time, fully, and without carrying interest (if it's a credit card).
If you have bad credit, the strategy is largely the same as building credit. However, you will be in a worse negotiating state upfront, and may have to deal with higher interest rates as a result. Building credit takes time, and the system is not perfect - but by keeping good habits your credit will increase slowly but surely.
True or False: Salaried jobs are harder than hourly jobs.
Both answers CAN be correct. But, it depends on how you define "harder".
Salaried jobs typically allow for higher earning potential long-term than hourly jobs, but also offer much more flexibility with benefits and when work is completed. The work might be more complex or specialized to your specific skills, which you might argue is "harder".
Hourly jobs might allow you to make more money in the short term, but are subject to scheduling shifts, last-minute switches with staff, and other unplanned incidents. This can mean your consistent pay schedule is upended by new management last-minute. This can be stressful and force you to make switches or changes to your lifestyle. Which, some could argue is "harder" than at a salaried job.
It depends on how you look at it!
What are employee stock options? What can you do with them?
1. Roth IRA - a PERSONAL (not employer sponsored) account. Unlike 401k or 403b, you choose to deposit money AFTER tax and afterward, everything in your account grows tax-free. You can only withdraw your earnings tax free in retirement (but can withdraw your contributions any time).
2. High-Yield Savings Accounts - (not an investment account) These are accounts that offer high interest rates at the cost of needing to hold a significant amount of money in them to see gains. While the rates do not quite match the investment highs of the stock market, HYSAs offer consistent, steady growth during times of uncertainty.
What is compound interest? How can a recent graduate from college maximize the benefits of compound interest?
Compound interest is when you earn interest in an account (savings, retirement, etc.) and you let the interest you earn grow on top of the new money you contribute.
Compound interest can take a good amount of time to build. However, once a substantial amount has accumulated, the interest you earn can easily exceed the contributions you put in at first. The main indicator of performance is time spent growing.
For recent college grads, this is especially important as the money you invest/save now will have much more time to grow than if you invested even 10 years later. Although it's a lot to juggle the financial responsibilities you have after college, making space for investing and benefiting from compound interest can be a game-changer.
True or False: Hourly jobs usually provide robust benefits like health insurance and retirement match plans.
FALSE! Typically, hourly positions do not offer the same benefits (health insurance, retirement match plans, transit pre-tax benefits) as salaried jobs.
Name as many types of days off/ leaves that you can think of. You earn 100 points per type named.
1. Vacation Days (PTO)
2. Holidays
3. Sick Leave (Extended)
4. Wellness Days
5. Parental Leave
6. Family and Medical Leave
7. Mental Health Days
Name as many retirement plans (Employer sponsored OR not) and what their primary benefit is. You earn 250 points PER correct answer (need the name of the plan and the primary benefit).
1. 401(k) Plans - retirement plans at any organization that pays traditional taxes, like tech companies, healhcare companies, and any organization that is NOT tax exempt. Primary benefit: Money is deposited from your paycheck without being taxed upfront, and is only taxed upon withdrawal in retirement.
2. 403(b) Plans - the parallel to 401(k) plans at TAX EXEMPT organizations like nonprofits or religious organization. This carries the same benefit as the 401(k) - money is deposited without being taxed upfront and is only taxed upon withdrawal.
3. Pension plans - typically less common than 401k or 403b nowadays, typically reserved for professions that have unions (government jobs, state workers, jobs with unions). These are plans where the employer pays a majority of the contributions on the employee's behalf for retirement.
4. Roth IRA - a PERSONAL (not employer sponsored) account. Unlike 401k or 403b, you choose to deposit money AFTER tax and afterward, everything in your account grows tax-free. You can only withdraw your earnings tax free in retirement (but can withdraw your contributions any time).
5. Traditional IRA - another PERSONAL account where, similar to 401k, you are not taxed upfront but will be taxed upon withdrawal in retirement.