C&CR Financial Literacy Study Guide

What type of federal funding is free money, but is based on financial need only?

federal grants

What possible tax or deductions may show up on your paycheck? (5)

federal income tax, FICA, medical taxes, state income tac, and social security

The _____ is a flexible market that allows you to work short-term, independent jobs.

gig economy

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.

W-2

Paying only the minimum balance on your credit card can lead to...

a bad credit score and paying more interest.

Which type of bank account typically offers the least (if any) interest?

a checking account

Which savings account will earn you the most money?

a savings account that compounds interest daily

Textbooks, transportation, room and board are all...

above the cost of tution

Which 2 items are important to consider when selecting a credit card?

annual percentage rate (APR) and fees

_____ are good places to look to find your current expenses when building your budget.

bank and credit statements

Check cashing companies are known for charging (high or low) fees?

high fees

What should you do before you use an ATM?

inspect the ATM and its surroundings to make sure it is safe to use (well lit area and make sure the machine does not look suspicious)

How can insurance protect you from financial loss?

insurance can prevent financial burden in the case of an accident, theft, or another event.

What are common features of financial institutions? (3)

paper checks, access to ATMs, direct deposits

What do you need to do to help you protect yourself from identity theft and fraud? (3)

regularly monitoring your credit report, freeze your credit, contacting lenders and credit bureaus to report inaccurate information

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 and consumer reviews.

Taxes are used to help fund what? (3)

taxes help fund schools and government departments, roads, and emergency services, and are used by federal, state, and local agencies

What is net pay?

the amount of money you're paid after all taxes and deductions are taken out of your paycheck.

What are 3 things you need to know about Free Application for Federal Student Aid (FAFSA)?

the earliest you can submit your FAFSA is October 1st of each year, states may have different deadlines for applying for state aid, the form is available online or on paper. (allows you to be eligible for federal aid and allows you to be eligible for early admission)

An insurance premium is paid by...

the policyholder

Secured loans are less costly than unsecured loans because _____

they usually have a lower interest rate and require collateral

The price of a single item within a group of items is known as the _____ of the item.

unit price

What are 3 benefits of having a good credit score?

when you need a loan, you'll have more offers to choose from, it will be easier to get an apartment, and you'll get better interest rates on your loans.

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 helps you prepare for unexpected expenses?

emergency funds

Liability insurance is ...

insurance that covers damage to someone else's car, damage to someone else's property, and injury to the other driver if it was not your fault.

How is an advertisement different from a comment from a regular consumer?

the advertisement is likely one-sided (biased) and will only tell you what they want you to know. The consumer will tell you the truth.

The envelope method, notebook and pencil, and online software are all methods of _____

tracking your spending

For most careers, which degree will most likely result in the highest lifetime earnings?

bachelor's degree

If there is a mistake with one of your bank accounts, who should you contact to resolve the issue?

contact your financial institution

What can be included in a benefits package available from your employer? (4)

disability insurance, healthcare insurance, paid time off, and matching contributions to a retirement account. (bonus, paid vacation)

What should be considered when setting a current budget? (3)

expenses, income, and future income

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 scholarships and grants.

How is having a security system for your home a risk management strategy?

it can protect you and your valuables from intruders and save you money from damages and robbery.

Why is it important to reconcile your bank statements?

it is important to reconcile your bank statements to make sure your bank account transactions and withdrawals are correct. Avoid over spending, detect errors, and determine if you've been scammed.

What will happen to your credit score if you do not manage your debt wisely?

it will go down cause you to not get loans or have higher APRs

What are 3 benefits of using a budget?

keeps you focused on what you what, you don't overspend, and you prepare for unexpected expenses

Preparing to pay for higher education can start in 9th grade or earlier by...

opening a 529 plan

What additional costs to a four year university will most likely be the most expensive?

room and board

How can you ensure you don't go over your budget?

round up our expense estimates to add a buffer

Why is it important to have insurance? (2)

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 and so individuals can defend against the possibility of financial loss due to unpredictable events. (defend you from financial loss and protect you from those who don't have it)

A pack of 24 pencils is more expensive than 12 pencils, but why could buying the 24 pack be the better deal?

the pack of 24 pencils may have better unit price, or the price of a single item within a group.

Making the choice to spend money on post secondary education pays off in the long run because:

the salary you will earn with a degree will pay back the cost of college over your career. Higher education = Higher salary.

What is the purpose of the W-4 form?

to inform your employer of how much federal income tax to withhold from your paychecks. (your employment status, credit, deductions, and any other amount that needs to be withheld)

Unexpected expenses... (3 things)

can make it hard to stick to your budget should be planned for may cause you to be unable to pay necessary bills

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

When looking for pre-approval on a car loan you should...

compare pre-approval offers and select the one that is best for you. (look for lowest interest rates)

When you are deciding what to buy, you should...

compare the unit prices of similar items to the one you want, wait for sales, and read reviews of unbiased opinions.

Making a good purchasing decision requires _____

comparing prices of similar items

Which payment option takes money out of your bank immediately?

debit card