Financial Snapshot
What is the difference between Gross Income and Net Income?
Gross income is the total earnings before taxes; Net income is take-home pay after taxes and deductions.
The value of the option or item you give up whenever you spend money on something else.
What is opportunity cost?
What is the primary purpose of an Emergency Fund?
To absorb unexpected financial crises without taking on high-interest debt or disrupting monthly living bills.
Why is transportation considered an "investment in access" rather than just a regular expense?
Because reliable transportation directly connects a person to employment, education, and earning potential.
What is the difference between a fixed expense and a variable expense?
Fixed expenses stay the same every month (e.g., rent); Variable expenses change based on usage or choices (e.g., groceries, gas).
Name one example of a liquid asset and one example of a liability.
Liquid Asset = Checking account balance or Emergency Savings; Liability = Student loans, car loans, or credit card debt.
What is one major structural difference between a Traditional Bank and a Credit Union?
Banks are for-profit corporations; Credit Unions are non-profit member-owned cooperatives (which often offer lower fees).
What is one immediate consequence of ignoring a necessary car repair or medical bill?
Immediate = Vehicle breakdown / worsening health;
Is the apartment with the lowest rent always the most affordable place to live? Explain.
No. A cheaper rent located far away can incur high commuting, gas, and parking costs that make the total monthly housing impact higher.
What does it mean to "Pay Yourself First"?
Routing money into savings or emergency funds immediately when paid, before spending on discretionary items.
True or False: Two characters who both earn $3,000/month in gross income will always have the exact same financial flexibility. Explain why.
Financial flexibility depends on existing obligations like debt payments, family responsibilities, starting savings, and fixed living costs.
Explain why a cell phone or car might be classified as a "Want" for one character but a "Need" for another.
Classification depends on context, such as whether the character's job requires reachable phone access or if public transit is unavailable for their commute.
What is one future consequence of ignoring a necessary car repair or medical bill?
Future = Lost employment income / credit score damage from debt collections.
What upfront cost must a renter usually pay before moving into a new apartment?
A security deposit (and often first/last month's rent).
What is discretionary spending? Give two examples.
Non-essential spending on wants (e.g., streaming subscriptions, dining out, concert tickets, coffee).
Why does the "Future You" simulation give characters fixed starting circumstances (income, age, location) instead of letting students build a "perfect" character?
Because in real life people start from unchosen circumstances, and financial literacy is about making intentional decisions within real-world constraints.
National Bank charges a $12/month checking fee unless you hold a $1,500 minimum balance. If your balance stays at $800 all year, how much will you pay in bank fees over 12 months?
$144 ($12 × 12 months).
If your character experiences a $300 emergency expense and has $0 in savings, what are two trade-offs they might be forced to make?
Cutting food/groceries, missing other bill payments, taking on credit card debt, or sacrificing discretionary spending.
How can choosing a $70/month public transit pass over a $400/month car payment impact a character's long-term goals?
It frees up $330/month in cash flow that can be redirected toward emergency savings, education, or paying off debt.
If your net monthly income is $2,200 and your total required expenses equal $2,350, what type of cash flow do you have, and what is the immediate risk?
Negative cash flow (-$150 deficit); the immediate risk is going into debt or defaulting on bills.
If a character has $5,000 in savings but owes $4,500 in credit card debt with high interest rates, why might an advisor rate their financial health as "Needs Attention" instead of "Excellent"?
High-interest debt consumes monthly cash flow and erodes savings over time through interest charges.
What are FDIC and NCUA insurance, and what is the maximum deposit amount that is protected?
They are federal insurance programs that protect account deposits up to $250,000 if a bank or credit union fails.
Why is building financial resilience more valuable than creating a "perfect" budget?
Unplanned events will always happen; financial resilience ensures you have the tools, savings, and flexibility to adapt when plans change.
What expenses make up the Total Cost of Ownership (TCO) for a car besides the monthly loan payment?
Auto insurance, fuel/gas, routine maintenance, parking fees, and registration/taxes.
Why is a budget described as a "living document" rather than a permanent rulebook?
Because income, expenses, goals, and life circumstances change over time, requiring ongoing evaluation and adjustments.