Financial Literacy Study Guide
___________ are good places to look to find your current expenses when building your budget.
Bank and credit statements
Which forms of payment are linked to a bank account which limits the amount of money you can spend to balance in your account? (2)
Checks and debit cards
What are common features of financial institutions? (3)
Checks, access to atms, direct deposit
When looking for pre-approval on a car loan you should...
Compare pre approval offers and select the one that is best for you
When you are deciding what to buy, you should...
Compare the unit price of items similar to the one you want
What can be included in a benefits package available from your employer? (3)
Disability insurance, paid time off, health insurance
What helps you prepare for unexpected expenses?
Emergency fund
What possible tax or deductions may show up on your paycheck? (4)
Fica, retirement savings, federal income tax, state income tax
What should be considered when setting a current budget? (3)
Financial goals, needs and wants, savings
What do you need to do to help you protect yourself from identity theft and fraud? (3)
Freeze your credit, contact lenders to address incorrect information, regularly monitor your credit report
What are 3 benefits of using a budget?
Helps reach short and long term financial goals, helps prioritize your spending, helps keep track of the money you receive
What should you do before you use an ATM?
Inspect the atm and its surroundings to make sure its safe
How can insurance protect you from financial loss?
Insurance can cover you or your property in case of an accident, theft, or another unpredictable event
Liability insurance is...
Insurance that will pay for injury to another driver and or damage to their car if you are in an accident, does not cover injuries to yourself
Everyone interested in postsecondary education should complete the Free Application for Federal Student Aid (FAFSA) because...
It allows you to be eligible for federal student aid and other scholarship grants
Why is it important to have insurance? (2)
It is important to have insurance so people can protect themselves from losing a lot of money in the event of an unpredictable event or something happens to them or their property, so you can defend against the possibility of financial loss due to an unpredictable event
What are 3 benefits of having a good credit score?
It will be easier to get an apartment, you'll get better interest rates on loans, when you need a loan you'll have more offers to pick from
Which savings account will earn you the most money?
One that compounds interest daily
Wearing a seat belt, not texting when driving, and driving carefully are all examples of...
Risk management strategies
What is one of the best ways to get reliable information about a product?
Search online reviews
Unexpected expenses... (3 things)
Should be planned for, may cause you to be unable to pay necessary bills, can make it hard to stick to your budget
How is an advertisement different from a comment from a regular consumer?
The ad is likely one sided
What is net pay?
The amount of money you are paid after all taxes and deductions are taken out of your paycheck
Making the choice to spend money on post secondary education pays off in the long run because:
The salary you earn with a degree will pay back the cost of college over your career
How is having a security system for your home a risk management strategy?
The security system will alert authorities and deter criminals protecting your valuables and property
A pack of 24 pencils is more expensive than 12 pencils, but why could buying the 24 pack be the better deal?
The unit price is actually cheaper in the 24 pack
Taxes are used to help fund what? (3)
They are used at the federal state and local levels, roads and emergency services, schools and government departments
Secured loans are less costly than unsecured loans because _________.
They usually have a lower interest rate
Why is it important to reconcile your bank statements?
To determine if you are charged fees, to detect errors, to avoid spending more than what is in your account
What is the purpose of the W-4 form?
To inform your employer of how much federal income tax to withhold from your paycheck
The envelope method, notebook and pencil, and online software are all methods of ______.
Tracking your spending
Your employer sends you a _______ form that tells you how much you've made and how much you've paid in taxes in the last year.
W2
Making a good purchasing decision requires __________.
Waiting until the product is on sale, reading receives of the product, comparing prices of similar items
What are 3 things you need to know about Free Application for Federal Student Aid (FAFSA)?
You can fill the form out online or on paper, each state may have a different deadline, you can fill out fafsa if you are a independent or a dependent
What will happen to your credit score if you do not manage your debt wisely?
Your credit score will go down
For most careers, which degree will most likely result in the highest lifetime earnings?
bachelor's degree
Which 2 items are important to consider when selecting a credit card?
both apr and fees
Which type of bank account typically offers the least (if any) interest?
checking
Which payment option takes money out of your bank immediately?
debit card
When filing an insurance claim, the policyholder must pay a ________________, which is the amount you owe before insurance will cover the rest of the bill.
deductible
What type of federal funding is free money, but is based on financial need only?
federal grants
If there is a mistake with one of your bank accounts, who should you contact to resolve the issue?
financial institution
The ___________ is a flexible market that allows you to work short-term, independent jobs.
gig economy
Check cashing companies are known for charging (high or low) fees?
high
Preparing to pay for higher education can start in 9th grade or earlier by...
opening a 529 plan
Paying only the minimum balance on your credit card can lead to...
paying more interest
An insurance premium is paid by...
policy holder
What additional costs to a four year university will most likely be the most expensive?
room and board
The price of a single item within a group of items is known as the ______________ of the item.
unit price
Textbooks, transportation and room and board are all...
Additional costs for attending a college or university
