Money Basics
What is income?
The money you receive or earn.
What is a budget?
A spending plan for managing income and expenses.
What is a credit score?
A number that represents your creditworthiness (300-800).
Poor:300 - 579
Fair:580-669
Good:670-739
Very Good:740-799
Excellent:800-850
What do the letters in SMART goals stand for?
Specific
Measurable
Acheivable
Related
Time
What’s a savings account?
A bank account used to hold money not meant for immediate spending.
What is the definition of net income?
Income after taxes and deductions (take-home pay).
What does P.Y.F. stand for?
Pay Yourself First
What does APR stand for?
Annual Percentage Rate
What makes a financial goal measurable?
You can track your progress with numbers (e.g., “save $400 by the end of WGF”)
What’s one major difference between a bank and a credit union?
Banks are for-profit; credit unions are member-owned nonprofits.
What is the difference between saving and investing?
Saving is setting money aside for short-term needs; investing is using money to try to earn more over time.
What’s one example of a variable expense and a fixed expense?
Variable - Groceries, gas, or other costs that change month to month.
Fixed - Rent, Mortgage, insurance, netflix, costs that don't change
What are the 4 C’s of credit? Explain each briefly
Character, Capacity, Capital, Collateral
What’s the difference between a need and a want when making goals?
Needs are essential (food, shelter), wants are nonessential (luxuries)
What is a check register used for?
To track all the money going in and out of a checking account
Why is financial literacy more valuable than simply having a lot of money? Give one real-life example of how someone with money without financial knowledge could still be in financial trouble.
Financial literacy gives you the tools to manage, grow, and protect your money over time. Without it, someone might waste their income, fall into debt, or fail to plan for the future.
You earn $500 and spend $600. What’s the term for this, and what should you do?
Budget deficit: Adjust expenses or increase income.
What is one potential danger of relying too much on credit?
Debt, high interest payments, poor credit score, or bankruptcy
Give an example of a long-term SMART financial goal.
Save $10,000 for college over the next 3 years by depositing $80 per paycheck
Why should you organize financial documents like pay stubs and tax forms?
To keep accurate records, avoid errors, and prepare for taxes or major purchases
Why is it important to view yourself as the CEO of “You, Inc.” when managing money?
Managing personal finances like a business helps you focus on growth, avoid financial failure, and plan long-term for financial freedom.
Why is it important to include burn money in a budget?
It helps maintain motivation and prevents burnout, making budgeting more sustainable
A company offers you a credit card with 0% interest for 12 months. What should you look for in the fine print?
What happens after the teaser period, late fee penalties, true APR, or if interest is backdated on unpaid balances.
Why is it important to revisit and modify your SMART goals over time?
Because life circumstances change, adjusting your plan ensures your goals stay relevant and achievable.
If you deposit $1500 into a high-yield savings Account, what happens to that money, and why do you earn interest?
The bank loans your money out to others; in return, they pay you high interest for the privilege of using it