Working with Money Flashcard

Front

What is the purpose of creating a budget?

Back

To track and manage income and expenses, prioritize spending, and achieve financial goals.

Front

Explain the difference between fixed and variable expenses.

Back

Fixed expenses remain constant each month, while variable expenses can change from month to month.

Front

How can you track your spending to stick to your budget?

Back

Track expenses using a budgeting app, keeping receipts, or using a spreadsheet

Front

What are the different types of bank accounts available for personal use? Options: Cash account, cryptocurrency account, prepaid card account; Investment account, student loan account, business loan account; Savings account, checking account, money market account, and certificate of deposit (CD); Credit card account, mortgage account, retirement account

Back

Savings account, checking account, money market account, and certificate of deposit (CD)

Front

What is the role of a bank in providing loans to individuals?

Back

To help individuals finance their personal needs.

Front

Explain the concept of compound interest and its impact on savings.

Back

Compound interest is the interest calculated on the initial principal and also on the accumulated interest of previous periods. It has a significant impact on savings as it allows the account balance to grow at an increasing rate over time.

Front

What factors affect a person's credit score?

Back

Payment history, credit utilization, length of credit history, new credit, and types of credit used

Front

How can individuals protect themselves from identity theft and fraud?

Back

By being cautious with personal information and using strong passwords

Front

What are the key components of a personal financial plan?

Back

Setting financial goals, creating a budget, managing debt, saving and investing, and planning for retirement

Front

Explain the concept of risk and return in investment decisions.

Back

The concept of risk and return in investment decisions involves the trade-off between potential for higher returns and the possibility of greater losses.