PACED Model
What does the “P” in the PACED model stand for?
Problem (Identify the problem)
Income you receive from wages, salaries, tips, and commissions is known as what type of income?
Earned income
What factor most often increases a person’s future earning potential—education or luck?
Education
What is the formula for a basic budget?
Income – Expenses = Savings (or Debt)
What does the “S” in SMART goals stand for?
Specific
In the PACED model, what step involves comparing the advantages and disadvantages of each option?
List Alternatives
What type of income includes interest, dividends, and gifts?
Unearned income
Give one example of a career that may require advanced education or training.
Examples: Nurse, engineer, electrician, lawyer, teacher, IT technician
Money left over after expenses is called what?
Savings/Surplus
Is buying a house a short-term or long-term goal?
Long-term
This step identifies what is important to you and what you value when making a decision. Which PACED step is it?
Select Criteria
Name two types of taxes taken out of a paycheck.
Examples: Federal income tax, state income tax, Social Security, Medicare
When comparing two cities, which major factor determines how far your salary will go?
Cost of living
Name two common categories of expenses in a personal budget.
Housing, transportation, utilities, food, insurance, etc.
Give one example of a low-risk investment option.
Savings account, CD, money market account
What is the main purpose of the PACED model?
To help people make rational, well-informed decisions
How can employee benefits influence a person’s career decision?
Benefits like insurance, retirement plans, and paid leave add value and make certain jobs more attractive.
Explain why a person with more job skills may earn higher wages.
They offer more value to employers and are in higher demand.
If expenses are greater than income, what financial result occurs?
Debt/Deficit
Which investment option involves owning part of a company?
Stocks
List all five PACED steps in order.
Problem, Alternatives, Criteria, Evaluate, Decide
Explain how income can affect your long-term career plan.
Higher income can support education goals, lifestyle choices, and open opportunities for long-term financial stability.
Describe how the market value of labor affects wages for workers.
Wages rise when skills are in high demand and fall when many workers can perform the same job.
Why is creating a budget important when moving to a new city?
Costs vary by location; budgeting helps prevent overspending and prepares you for new expenses.
Explain the difference between a 401(k) and an IRA.
401(k): Employer-sponsored retirement plan
IRA: Individual retirement account anyone can open