Making Payments
If you’re using the Snowball Method, which debt do you focus on first after you’ve made all of your minimum payments?
a. Highest balance
b. Lowest interest rate
c. Lowest balance
d. Highest interest rate
c. lowest balance
What is the difference between a debit card and a credit card?
Credit- borrowed money that you have to pay back later
What is it to remove funds from an account?
Withdraw
What does employer match mean for a 401K?
When you contribute money toward your 401K, your employer will match up to a certain dollar amount. For example, you can contribute $5,000 and your employer can match, making it $10,000.
All investing requires some level of _________, meaning you are not guaranteed to make money.
Risk
DOUBLE JEOPARDY: What is the benefit of using the High Interest Method and the benefit of using the Snowball Method?
High Interest Method- Pay off debt faster with less interest paid.
Snowball Method- Payments are usually lower and more manageable to someone on a budget
What are the pros and cons of using a credit card?
Pros- Cash back, airline points, increase credit score
Cons- Easy to overspend, high interest rates, penalties for late payments
Which account that allows you to make deposits and withdrawals to cover daily expenses?
Checking Account
What are the 3 types of retirement accounts we've discussed in group?
401K, Traditional IRA, Roth IRA
What is a stock?
A stock represents a share in the ownership of a company, including a claim on the company's earnings and assets.
Vivian wants to pay her debts with the smallest possible amount of interest. Identify which method she should use and explain which loan she should pay off first.
a. $2,400 balance on an auto loan with a 6.0% interest rate
b. $6,700 balance on a student loan with a 3.5% interest rate
c. $900 balance on a personal loan with 10.2% interest rate
High interest rate method- pay off the $900 loan with the 10$ interest rate first.
What are 3 alternative payment methods to credit cards?
Cash, Cash Apps, Debit Cards, Writing Checks, etc.
What account at the bank is used to set aside money and that pays you interest?
Savings Account
What is the definition of ROI
Return on Investment
DOUBLE JEOPARDY: What does it mean to have a diversified portfolio and why should a person do this?
Diversified portfolio means that you are investing in multiple things. This is a good thing because if one investment loses money, hopefully the others go up and you make money overall.
If you’re using the High Rate Method, which debt do you focus on first after you’ve made all of your minimum payments?
a. Lowest interest rate
b. Highest interest rate
c. Highest balance
d. Lowest balance
b. Highest interest rate
What is the 3 digit unique number on the back of you card that provides additional security?
Budgeting requires prioritizing needs over wants or necessities over luxury. What are 3 necessities you need to pay for each month?
Utility bills, medications, food, warm weather gear, rent, paying off debts, etc.
What happens when you withdraw money from your retirement account early?
You pay a penalty fee. In Minnesota, you pay a 10% fee if you withdraw before age 59 1/2.
What are three things to consider when investing in a stock or mutual funds?
Company's history, is the trend going up or down, current events/news, how much the stock is to purchase, potential risk, long-term versus short-term investing.
____________ is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts.
Bankruptcy
A number created from a scoring model that uses information from your credit history?
Credit Score
This is the extra amount of money you have to pay back if you don't pay back the money you borrowed?
Interest
What is the difference between a Traditional IRA and Roth IRA?
Traditional IRA- Pay taxes when you withdraw money when you are retired
Roth IRA- Pay taxes now and no taxes later
What are 5 different industries that someone could invest in?
Oil/Energy, Automotive, Technology, Real Estate, Agriculture, Food/Beverages, Retail, Art, Entertainment, Financial Institutions, Healthcare/Pharmaceuticals, Industrial, Metals/Gems, etc.