Financial Literacy 1
A financial institution that accepts deposits from the public.
What is a Bank?
The knowledge and application of various financial skills.
What is financial literacy?
The abbreviation for an Automated Teller Machine?
What is an ATM?
The money you receive from your job
What is a salary?
When you take money out of your bank account.
What is a withdrawal?
A thing that is borrowed, especially a sum of money that is expected to be paid back in interest.
What is a loan?
The money charged for the privilege of borrowing money.
What is interest?
A paper document issued by an employer to pay an employee for services rendered.
What is a paycheck?
The lowest hourly wage an employer can pay their employee.
What is minimum wage?
When you put money into your bank account.
What is a deposit?
A card issued by a bank that allows the account holder to transfer money electronically to another account when making a purchase.
What is a debit card?
Name 2 ways to improve your financial literacy.
Start budgeting, read about finances, take a personal finance class, set financial goals
Johnny really wants the new Playstation 5, which costs 800.00. Johnny has $20.00 in his bank account. However, he just received a credit card with a $2,500 limit. Should Johnny use his credit card to buy a PlayStation? Why or why not?
NO! Johnny should not use his credit card because he does not have enough money in his checking account. A person should never borrow money if they do not have the same amount in their checking account.
List 2 advantages of having a credit card
Able to buy needed items now
Don’t have to carry cash
Creates a record of purchases
More convenient than writing checks Consolidates bills into one payment
A plan for earning and spending over a period of time.
What is a budget?
A card issued to consumers that is used to make purchases, with the agreement that the cardholder will ultimately pay back the card issuer for the cost of the items purchased, along with any agreed-upon fees and interest
What is a credit card?
Money owed from one person to another person/an institution
What is debt?
If Santiago bought a football that cost $21.50 and they ended up paying $23.43, what kind of tax did they pay?
What is sales tax?
50-30-20 RULE
50% of your income: needs. Necessities are the expenses you can’t avoid.
30% of your income: wants. Distinguishing between needs and wants isn’t always easy and can vary from one budget to another.
20% of your income: savings and debt. Savings is the amount you sock away to prepare for the future.
A type of bank account that allows you to deposit and withdraw money for daily transactions easily.
What is a checking account?
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 the best decision. A person is charged interest when their credit card balance is not at 0 by the end of the month.
The maximum amount of credit a financial institution extends to a client on a credit card.
What is credit limit?
401(k) and IRA
What are retirement accounts?
The score given by a credit agency regarding your ability to pay off a debt.
What is a credit rating/score?
An amount of money that a government requires people to pay according to their income
What are taxes?