Budgeting Basics
Define "budget"
How much money an individual has available to spend
Define "credit history"
A profile on how you have handled money in the past.
Explain the concept of a credit card
Purchase something immediately, pay off later.
State the difference between a credit card and a debit card.
Debit card - paid instantly
Credit card - pay later, receive item immediately
Define a scam
A scam is fraudulent act designed to trick individuals into handing over money, valuables, or sensitive personal information
Examples of reasons you should re-evaluate your budget
Change in your income or expenses. This includes a raise from work, increase in rent, etc.
List examples of items included in a credit history
How quickly you pay off loans, how reliable you are with paying bills, outstanding debts, available credit.
List some advantages of having a credit card
Potential to earn rewards, able to buy items immediately, more protection from fraud, limit amount of cash you need to carry.
What does PIN stand for?
Personal Identification Number
List steps to protect yourself from identity theft.
Safe internet use, destroy unneeded personal financial information, protect social security number (SSN), review credit report, be on alert for SCAMS!
This typically takes up MOST of an individual's budget
Housing (rent, mortgage, etc.). 25% of a person's budget!
Who is able to see your credit report?
Potential employers, landlords, insurance companies, credit card companies, banks.
What are some responsibilities you will have with owning a credit card?
Understand interest rate, understand all terms and conditions, try to stay ahead on payments, try and maximize benefits from card.
What should you consider when selecting a debit card?
Look for banks/credit unions with branches near you, understand fees that may be charged for using an ATM, consider transfer fees (applicable when moving funds from checking to savings accounts and visa versa), select a debit card that will enable you to easily manage your purchases and pay your bills.
Name one way you can make money quickly.
You cannot. "Get rich quick" schemes are scams
Typical option to do with extra money...
Put in emergency fund!
Typical credit report range (numbers)
300 to 850. Good is anything 650+
What are some typical credit card interest rate percentages?
10%, 15%, 25%
List some protective features offered by debit card companies
Zero liability, fraud claims, right to dispute, communicate travel plans
Identify one way to keep your information safe.
Keep and file your receipts, be mindful of your wallet, if you have a checkbook; store it at home, use password protection on phones (and other electronic devises), shred mail that may give away personal identifiable information (credit card statements/offers, junk mail, etc.)
The last thing you should consider in your budget
Non-necessities (entertainment, takeout, jewelry...)
List ways to improve your credit score
Complete applications accurately, be responsible with credit card use, pay full credit card balance, work with creditors, have a consistent work history, report lost or stolen credit cards ASAP!
What are individuals' rights with owning credit cards?
Zero liability - you are not responsible for fraud charges.
Know your bank account balance and know what is outstanding (or what will be paid out in the near future), if you overdraw your account you will be charged with an overdraft fee, keep a ledger (like having a check book) and balance the information regularly.
List organizations that can help you recover your identity if it is stolen.
Credit bureaus, law enforcement, federal trade commission (FTC), banks and credit card companies.