As a Consumer
What is the difference between a want and a need? (Hint: A little economics review) Give an example of both.
A want is something that a person desires and is able to purchase. A need is a required item that a consumer needs for survival.
Need: (Answers will Vary) Ex: Food
Want: (Answers will Vary) Ex: Video Game Console
Hint: (part of our government)
The Federal Reserve System is the banking system of the Untied States of America and is the controller of money, interest rate,s and government securities.
Define net pay.
Net pay is the income left after all of the taxes are taken out of the gross pay.
Define bank reconciliation.
Bank reconciliation is when a report is made to check if there are differences i na bank statemetn and checkbook balance.
What is the difference between Common vs. Preferred Stocks?
Common stocks are when a perosn owns part of the company. A preferred stock allows the owner to get cash dividends before common stocks. preferred stockholders get leftover assets if the company fails.
What is the definition of values? Explain how the factor into personal financial planning.
Values are the ideas, beliefs, ideologies, and principles that a person deems important and lives by. This is a big factor in how you may your goals during personal financial planning, and what you would like to achieve.
What are personal opportunity costs?
A person’s time, skills, and health are all personal opportunity costs. It is important to make decisions carefully.
Discretionary income is the money that is left after you pay fro all of your essential purchases. This should be properly budgeted so that you have a lot of money to save, money to pay for essentials, and then some money for wants.
What goes in the bottom left corner of a check?
Extra Credit: Left to right, what comes after it?
The routing number of the bank.
Extra Credit: Depositor’s account number, check number
Define bond.
When a corporation/government/municipality writes down that they will pay money back with interest.
What is the acronym SMART stand for?
S - Specific
M - Measurable
A - Achievable
R - Realistic
T - Time-Based
How can you use it?
Personal Balance Sheet - THe net worth statement, financial statement with the value of what an individual owns, their debts, and their net worth.
Personal Financial Statement - A document with the information on a person’s financial position in life with both their income and their spending.
What are the 4 types of banking fees?
1) Out-of-Network ATM Fee
2) Overdraft Fee
3) Minimum Balance Fee
4) Maintenance Fee
List 4 ways to take money out of your checking account?
1) Paying with the check
2) Paying with the debit card
3) ATM Withdrawals
4) Digital Transfer of Money
What is insurance? Why is it important?
Insurance is the act of protecting your assets from financial loss with a policy. The insurance company takes the risk of the indivudal buying the policy because the individual pays the premium.
Must include explanation of premium.
What drives economics?
Scarcity
Hint: They are types of stuff a person owns to accumulate wealth.
1) Liquid Assets - Cash/Items that quickly become cash
2) Real Estate - Land and buildings/structures on said land
3) Personal Possessions - What a person has in value
4) Investment Assets - All of the investments a person makes and their total
What are the advantages of savings?
1) Interest rates are higher
2) Less incentive to spend because of limited access
3) Can slowly accumulate money for a goal
Define compound interest and annual percentage rate.
Compound interest is interest that acts on the original principal amount and the interest that you have accumulated. APR or annual percentage rate is the yearly interest rate on the credit card account.
1) Cost of the item being insured
2) Cost of replacing or fixing parts
3) History of the policyholder
What is the different between supply and demand? State the conditions of a surplus and a shortage.
The difference between supply and demand is that supply is the goods/services available in the market and demand is the amount of goods/services that consumers want/can purchase.
Surplus: Supply surpasses the demand.
Shortage: Demand surpasses the supply.
What is insolvency?
What are the advantages of checking?
1) Easy to withdraw money (ATMS)
2) Can write checks
3) Debit card directly takes fund (aware of money in account)
4) Transfers easily to pay bills
List the 5 Cs of Credit.
1) Character
2) Capacity
3) Capital
4) Collateral
5) Conditions
Rate Mutual Funds, Bonds, Stocks, and Savings from lowest to highest in risk.
1) Savings
2) Bonds
3) Mutual Funds
4) Stocks