Cycle #3 - Financial Life Skills

Money that is backed by the government and is legal tender to spend is called what?

• Reserve Money

• Fiat Money

• Cyber Currency

• Bit Coin

Banks give out loans to people. Where do banks get the money to loan to people?

• They print it from a machine.

• They lend out money from savings and checking accounts

• They don't loan money out, its all on a computer and not real

• They steal if from another bank and give it out.

Organize these options into the right categories (financial Institutions)

Groups:

(a) Commercial Bank

,

(b) Credit Union

,

(c) Payday Loan Company

,

(d) Title Pawn Lender

• Use Collateral to get a loan.

• 
• Loan for your paycheck

• Offer lowest interest rate to their members

• Insured by the FDIC

• Debt Trap

• They will help you, but they want profits.

• Insured by the NCUA

Banks are _____________ businesses that offer a variety of services to the public

• For profit

• Non profit

• Public

• Private

Organize these options into the right categories

Groups:

(a) Savings and Checking accounts

,

(b) Retirement Account

,

(c) Mutual Funds

,

(d) Stocks

• Easy access with a Debit Card

• FDIC insured up to a certain limit

• Can't withdraw until 59 1/2 years old

• High Risk

• This is a need you must have one.

• Interest earned on deposits

• Roth and Traditional are two types

• Purchase = part ownership in a company.

• High Risk - High Reward

• Medium Risk

• Least Risky Investment

• A company takes your investment and spreads it over low risk stocks

• One from an employer is called 401K

• Medium - High Risk Investment

The 50-30-20 rule. 50% of your income should be spend on your ​ (a)   , 30% of your income should be spend on ​ (b)   spending and 20% should be spend on ​ (c)  

• expenses
• flexible
• investments
• Risk
• Revenue

Match the following with the different ways to pay for goods and services.

• Safe, quick, but need a charger

• Cash

• quickly deducted from bank account

• Check

• Safe, but the banks money

• Phone App

• Bills, Coins, universally accepted.

• Debit Card

• Best way to send money in the mail.

• Credit Card

Match the following income types

• Sign a contract for a specific job

• Tips

• profit made from the sale of a good

• Capital Gain

• Extra money given as reward for service

• Hourly Wages

• Paid for each hour of work you complete

• Contractor

• Guaranteed money for a job - not hours

• Salary

Which answer below is NOT one of the 3 C's of Credit Worthiness?

• Collateral

• Capacity

• Certificate of Deposit

• Character

Detailed summary of your entire credit history. Includes where you lived, where you worked, and every loan you have ever received.

• Credit Worthiness

• Credit Report

• Credit Score

• Credit Karma