Personal Finance Exam Review

Budgeting

• A budget is a plan for how to spend and save money.

• A budget is a list of all the things you want to buy.

• A budget is a way to keep track of your friends' expenses.

• A budget is only necessary for large purchases.

Career Planning

• Know your skills, interests, and values.

• Ignore job demand and salary.

• Focus solely on education without training.

• Choose a career based on friends' opinions.

Saving

• Save for emergencies, goals, and the future.

• Invest all your money in stocks immediately.

• Spend all your income to enjoy life now.

• Only save if you have extra money left over.

Insurance

• Protects against financial loss.

• Only covers health-related expenses.

• Is a type of investment.

• Is mandatory for all citizens.

Credit

• Credit means saving money for future use.

• Credit score ranges from 100–900, with lower being better.

• Credit cards are a type of loan that must be paid in full each month.

• Credit means borrowing money to pay later.

Banking

• Banks and credit unions offer checking accounts for daily spending and savings accounts for saving money safely.

• Only banks offer checking accounts, while credit unions do not.

• Debit cards can only be used for savings accounts.

• Online banking is only available during business hours.

Investing

• Putting money into something to grow wealth, such as stocks and real estate.

• Saving money in a bank account with no risk.

• Buying items to resell at a higher price.

• Donating money to charity for tax benefits.

Money Mindsets

• Spender

• Saver

• Avoider

• Investor

Paying for College

• Scholarships

• Grants

• Work-study

• Student loans

Taxes

• Required payments to the government for schools, roads, healthcare, etc.

• Voluntary contributions to community services.

• Fees paid for government services only.

• Payments made for private sector services.