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Financial Freedom
Unit 5 Review - Financial Accounts & Financial Freedom
Question | Answer |
---|---|
What is the term used to describe transactions that post to an account immediately? | Point-of-sale |
When 2 people have authority and access to a checking account | Joint Checking |
What is the biggest problem with savings accounts today? | The interest rates are lower than the inflation rate |
A bill automatically paid out of a checking account whenever it is due | Auto-pay |
Money that has been spent or committed to be spent, but not processed by the bank yet | Floating money |
What is the difference between a savings account and a CD? | CDs earn a higher interest rate than savings accounts |
How can you achieve financial freedom? | Get out of debt |
1st step to financial freedom is to stop digging your own pit. That means? | Stop getting into more debt |
A major financial emergency | Ambulance trip to the ER |
A minor financial emergency | Broken window |
Amount of money for your first emergency fund | $1,000 |
Amount to trim off your budget to save up for an emergency fund | $5 |
A general increase in prices and fall in the purchasing value of money | Inflation |
Very high rates of inflation which rapidly erode the value of currency | Hyperinflation |
Use this method to pay off your debts faster | The Snowball Method |
Formula for calculating simple interest | Principal x rate x term |