Types of Accounts
What is the name of the financial product that allows you to write checks and connect a debit card against the money in your account?
Checking Account
When making payments on a credit card, you should pay....
statement balance in full, pay off each month/billing cycle
What are some common mistakes people make in long-term planning?
Not starting early enough, not saving enough, not diversifying investments, and not regularly reviewing and updating the plan.
True or false: Banks are for-profit institutions, while credit unions are not-for-profit institutions owned by their members.
True
What is one of the first steps in creating a budget?
Determining your income and expenses
What is the name of the savings account that is specifically designed for covering unexpected and urgent expenses that every person should have in place as soon as possible?
Emergency Savings
What is the difference between a credit card and a debit card?
A credit card allows you to borrow money and pay it back later, while a debit card uses funds directly from your checking account.
What is the best time to begin saving for retirement?
As soon as possible (the younger you are, the more time you are giving your retirement investment accounts to grow.)
More time= More money
True or False: Credit union board of directors serve as volunteers without compensation (pay)
True
What is the difference between fixed and variable expenses?
Fixed expenses are the same amount each month (e.g. rent), while variable expenses can change month-to-month (e.g. groceries).
What is the name of the savings account that offers a fixed interest rate and a fixed term, typically ranging from 3 months to 5 years?
Certificate of deposit (CD)
What is the best way to improve your credit score?
Pay bills on time, keep credit card balances low, and avoid opening too many new accounts at once.
What allows your invested money to exponentially grow over time?
Compound Interest
What is predatory lending?
Predatory lending is a practice in which a lender takes advantage of a borrower's lack of knowledge or financial distress to offer loans with unfair, deceptive, or abusive terms.
What are the benefits of creating a budget?
Helps you track your spending, prioritize your expenses, and save for your financial goals.
What is the name of the account that allows you to earn higher interest rates than a traditional savings account but has limited rights to occasionally withdraw money or write checks against the account?
Money Market Account
What is it called when you take out a loan that combines multiple debts into one loan with a lower interest rate?
Debt Consolidation/ Refinance
Calculate this by taking the total amount of money and assets you have (like a home, car, etc) and subtracting liabilities, the total amount of money you owe (mortgage, car loans, credit cards, etc.)
Net Worth
What is the name of the fee that a bank or credit union charges for processing a transaction that exceeds your available account balance?
Overdraft Fee
What is the term for the amount of money that you have available to spend or invest after paying taxes and other expenses?
Disposable income/ Discretionary Income.
What is the name of the savings account that is specifically designed for medical expenses?
Health Savings Account (HSA)
What is the difference between good debt and bad debt?
Good debt is debt that is taken on for investments that will increase in value over time, such as a mortgage or a student loan. Bad debt is debt that is taken on for items that will decrease in value over time, such as credit card debt.
What is the name of the savings account that is specifically designed for education expenses?
529 Plan
What are the names of the federal agencies that insure deposits in banks and credit unions up to $250,000?
Banks-FDIC (Federal Deposit Insurance Corporation)
Credit Unions-NCUA (National Credit Union Administration)
According to the 50/30/20 rule of budgeting, how much of your income should be allocated towards wants?
30%(or less)