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Financial Literacy Review (Complete)
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Terms in this set (17)
The MORE education and training you have, the _______ likely you are to earn to a higher income.
MORE
True or False: Employers are NOT generally required by law to take taxes out of an employee's paycheck.
FALSE. Employers ARE generally required by law to take taxes out of an employee's paycheck.
What is a budget?
A useful tool to help you meet
your financial goals.
When investing, _________ is the chance your investment may make LESS money than you expect or that
you could even LOSE money!
RISK
True or False: It is normally less costly to borrow from PAYDAY LENDERS than from banks.
FALSE: Payday loans are generally MORE expensive than bank loans.
What is interest?
Interest is a small amount of extra money that the bank gives you just for keeping your money there.
What is a credit report?
A credit REPORT contains information about the types and amount of credit an individual has and how they pay their bills.
How many months emergency savings do experts recommend that you have?
THREE MONTHS
How CAN you avoid check cashing fees?
You can avoid check cashing fees by depositing your paycheck in a bank account.
True or False: Banks charge HIGH fees, you should have at least $1000 before you open an account.
FALSE: Many bank accounts have low fees or are even FREE! You can open many bank accounts with as little as $25 or LESS!
People who pay their bills LATE each month generally have ____________ credit scores than those who pay their bills on time.
LOWER
Even if a bank goes out of business, money in an ________ insured account IS protected.
FDIC (Federal Deposit Insurance Corporation)
What is a stock?
A financial tool or security that represents part ownership of a company.
What does it mean to deposit?
To put money IN a bank account.
What does it mean to withdraw?
To take money OUT of a bank account
True or False: Buying a single company's stock usually provides a SAFER return than a stock mutual fund.
FALSE: Mutual funds help you to diversify your investments and reduce risk, thus helping you to have a safer return.
What is a mutual fund?
An investment that pools individuals' funds together to buy a group or collection of stocks or bonds. Mutual funds help you to diversify your investments and reduce risk which generally helps you have a safer return.
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