Budgeting Basics
What is the difference between a need and a want?
A need is essential for survival; a want is non-essential.
Money left after taxes and deductions is called this.
What is net income?
This type of card is used for daily spending and money is taken directly from your bank account.
What is a debit card?
The amount you pay monthly for insurance coverage.
What is a premium?
Alex pays only the minimum payment on a credit card every month while continuing to make new purchases. Over time, the balance grows larger because of this borrowing cost.
What is interest (APR)? |
This budgeting rule suggests 50/30/20. What does each number represent?
50% needs
30% wants
20% savings
Total earnings before taxes are taken out.
What is gross income?
A credit card is an example of this type of credit.
Hint: (?) end- credit
What is open-end credit?
The amount you pay out of pocket before insurance begins helping pay.
What is a deductible?
This loan is used to purchase a home.
What is a mortgage?
Rent and insurance are examples of this type of expense.
What are fixed expenses?
This form determines how much tax is withheld or kept from your paycheck.
Hint W-?
What is a W-4?
This measures how trustworthy you are with borrowing money, usually from 300–850.
What is a credit score?
This type of auto insurance pays for damage you cause to others.
What is liability insurance?
The upfront payment made when buying a house.
What is a down payment?
Money saved for unexpected expenses like car repairs or medical bills.
What is an emergency fund?
This document shows a summary of your annual earnings (income) and taxes withheld from your job.
What is a W-2?
What lenders are known for giving you savings accounts, CD's, and MMA's.
What are banks or credit unions?
Taylor wants a health insurance plan that lets her visit specialists without needing approval from a primary doctor and gives her the largest network of doctors to choose from. She wants a lot of doctor options and it can be more expensive. Which type of plan best fits her needs?
What is a PPO?
Spreading investments among stocks, bonds, ETFs, and savings to reduce risk is called?
What is diversification?
This financial concept means what you give up when choosing one option over another.
What is opportunity cost?
Jordan compares two colleges: one is cheaper but farther from home, while the other costs more but offers better career connections. Jordan is weighing this financial concept before deciding. | What is opportunity cost if he chooses the cheaper one?
If Jordan chooses the cheaper college, the opportunity cost is the better career connections and opportunities he gave up at the more expensive college.
This term describes how easily money can be accessed.
What is liquidity?
Your house is damaged in a storm. A tree fell on the roof, the rain damaged things inside your home, and now you have to go to a hotel for a week for it to be fixed.
Name the THREE types of homeowners insurance coverage shown in this situation.
Dwelling coverage
Personal property coverage
Additional living expenses
A 16-year-old is saving money for college in 2 years. They want to keep their money relatively safe but still want to earn a little more interest to have some extra money.
Which option is BEST: savings account, bonds, mutual funds, or stocks—and why?
What are bonds because they are relatively low risk, more stable than stocks, and can earn slightly higher returns than a savings account for a short-term goal?