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econ
| Question | Answer |
|---|---|
| What information do you need to know to understand your personal finances? | Income, goals, plan to reach goals |
| ___________ is something that takes away from your financial peace and sense of hope for the future. | Debt |
| Why is it important to track your expenses throughout the month? | Make sure you are sticking to your budget |
| How can budgeting help you? | Gives you control over your money |
| Personal finance is 20% knowledge and 80% ________________. | Behavior |
| What is the first foundation of personal finance for high school students? | Save $500 for an emergency fund |
| What are the 3 main reasons why you should save your money? | Emergencies, large purchases, wealth building |
| What are three examples of variable expenses? | Electric, groceries, gas |
| Building wealth ultimately comes down to what two things? | Investing consistently and time allowing it to grow |
| True/False Paying with a debit card typically leads to overspending | False |
| True/False Most people pay their credit card off in full every month | False |
| What does it mean to live on less than you make? | Keep your expenses below what you make per month and save |
| How can you fund a college degree without taking on debt? | Scholarships, grants, work study, cash flow |
| A budget doesn’t tell you not to spend, it actually gives you ____________ to spend money on the things you want/need. | Permission |
| What are the 4 components of a budget? | Income, giving, saving, expenses |
| Who makes decisions about personal finance? | Individuals and families |
| Credit cards became available after World War I and now they are ____________ acceptable in today's society. | socially |
| What is the formula to calculate your net worth? | Assets - liabilities = net worth |
| List the four types of expenses and define them. | Fixed: same amount each month; Variable: pay each month but total varies; Discretionary: non-essential spending; Intermittent: not every month, occurs at certain times |
| List an example of an appreciating asset and a depreciating asset. | Appreciating: house; Depreciating: car |
| If your assets total more than your liabilities, you have a __________ net worth. | Positive |
| What does living paycheck to paycheck mean? | Income is used solely for expenses, little to no savings |
| Give at least two examples when it would be appropriate to use your emergency fund. | Blown car tire; A/C stops working |
| When setting financial goals they should be what 5 things? | Specific, measurable, time-sensitive, yours, written down |
| What are your 4 walls? | Food, utilities, shelter, transportation |
| How often should you create a budget? | Monthly |
| What is it called when you buy something that you did not plan for? | Impulse buy |
| What is gross income? | Total amount of money before taxes |
| What is your biggest tool to build wealth? | Income |
| What is the average rate of growth of an investment over time called? | Compound growth |
| What factors determine your credit score? | History of debt and payments |
| The _____________ is the total amount of the car loan, plus taxes and fees | Principal |
| The amount of time you have to pay back a loan is called? | Term |
| What is the debt snowball method? | Pay minimums on all debts, pay extra on the smallest, roll payment to next smallest until paid off |
| What are the three components of compound growth? | Time, money, rate of return |
| What are the two types of markets called? What do they mean? | Bull: markets going up; Bear: markets going down for a prolonged time |
| What is the difference between a Roth and traditional IRA? | Roth: deposit post-tax and withdraw tax-free; Traditional: deposit pre-tax and pay taxes on withdrawals |
| Who technically owns your house when you have a mortgage loan? | The lender |
| What is the biggest depreciating asset most people have? | A car |
| What is the difference between a cash-flow statement and a budget? | Cash-flow shows past spending; budget plans future spending |
| State the difference between a subsidized and an unsubsidized loan? | Subsidized: no interest until 6 months after graduation; Unsubsidized: interest starts immediately |
| How are ETFs and mutual funds similar? | Both are collections of assets that diversify investments |
| On average how long does it take people to pay back student loans? | 20 years |
| True/False You still have to pay back student loans even if you drop out. | True |
| Why is it important to think about your future before going to college? | Avoid unnecessary debt for a degree you won’t use |
| What is collateral for a loan? | An item offered to secure a loan that can be taken if you don’t pay |
| What are the three ways to get free money to help pay for college? | Scholarships, grants, work-study |
| What should you start with when budgeting with an irregular income? | Expenses |
| What are the three types of financial goals? | Short: up to 2 years; Medium: 2–5 years; Long: 5+ years |
| Define inflation. | General rise in prices of goods and services over time |
| Why should you get your free credit reports every year? | Check for accounts opened without your permission |
| List at least three types of fees associated with credit cards. | Interest, annual, late, cash advance, over-the-limit, merchant |
| Define opportunity cost. | What you give up when you choose one option over another |
Created by:
vega.calvo