26 Questions
What is the best way to create a budget?
Divide your income into categories and plan how much you’ll spend on each.
How does a debit card work?
It lets you pay with the money in your checking account.
Which of the following is true about credit cards?
If you don’t pay your balance off in full each month, you’ll accrue interest.
Someone broke into your apartment and stole all of your stuff. Luckily, you have renter’s insurance. How do you request that your insurance pay for the lost items?
File a claim.
What is one advantage of creating minimum savings goals before buying any 'wants'?
Helps prioritize saving over spending on unnecessary items.
What is the purpose of deciding a maximum amount to spend each week when managing finances?
Helps limit overspending and promotes better financial discipline.
What is a potential consequence of not paying off the balance in full each month with a credit card?
Accrual of interest on the remaining balance.
How does renter’s insurance help protect against loss or damage to personal belongings?
By reimbursing the policyholder for the value of lost or damaged items.
'Borrowing' money from a credit card without paying it back promptly can lead to what financial consequence?
'Hidden' costs such as interest charges and potential debt accumulation.
'Budgeting' involves which of the following actions?
'Tracking' income and expenses to control spending habits.
What role does a 'deductible' play in an insurance claim?
Serves as an upfront payment made by the policyholder before the insurance company covers the remaining claim amount.
In terms of financial planning, what does 'accruing interest' typically indicate?
Cost associated with borrowing money or carrying a balance on loans or credit cards over time.
How does a credit card differ from a debit card in terms of accessing funds?
Debit cards let users pay directly from their checking accounts, while credit cards offer borrowing facilities with potential interest charges.
What is the name of the document that shows you what you were paid and how much was taken for taxes?
Paystub
When moving to a new rental, how much is the security deposit often?
First and last month’s rent
You received $200 for your birthday. What should you do first?
Deposit it all straight into your savings account
What is the name of the document that tells you what you need to pay on your credit card?
Statement
What happens if you go into debt?
All of the above
If you charged $500 to your credit card to buy a new TV and paid it off after 6 months, what is the principal in this situation?
$500
If you decide to rent a place to live, you’ll need to sign a _____.
Lease
If you pay off only the amount owed on your credit card each month, but don’t pay it off completely, what’s that called?
Making your minimum payment
Your account statement arrived. You had a balance of -$52.79. After the $307.74 deposit from Rolands Bookstore, what is your new account balance?
$316.95
On Jan. 8, your account was charged $30.00 for an overdraft fee. Why did that happen?
You spent more than what was in your account.
Why wouldn’t every purchase you made show up on your account statement?
Some take time to clear.
How often are you required to make payments on an auto loan?
Once a month.
What’s the difference between net pay and gross pay?
Gross pay is your total paycheck and net pay is what you take home after taxes.
Study Notes
Budgeting and Financial Planning
- Creating a budget helps to track income and expenses, making it easier to manage finances.
- Budgeting involves setting financial goals, identifying income and expenses, and making adjustments to achieve goals.
Debit and Credit Cards
- A debit card withdraws money directly from a user's bank account, whereas a credit card borrows money from the card issuer.
- Using a credit card without paying it back promptly can lead to accumulating interest and debt.
- Paying off only the minimum amount owed on a credit card each month, but not paying it off completely, is called revolving debt.
Insurance and Protection
- Renter's insurance helps protect against loss or damage to personal belongings by providing a way to request reimbursement for lost items.
- A deductible is the amount paid by the policyholder before the insurance coverage takes effect.
- Renters' insurance can provide financial protection in case of theft or damage to personal belongings.
Financial Consequences
- Not paying off the balance in full each month with a credit card can lead to accumulating interest and debt.
- Borrowing money from a credit card without paying it back promptly can lead to financial consequences like debt and interest.
- Going into debt can lead to financial difficulties and difficulties in achieving financial goals.
Financial Documents
- A pay stub is a document that shows an individual's earnings and the amount of taxes withheld.
- A credit card statement is a document that shows the amount owed on a credit card and the payment due date.
Renting and Security Deposits
- A security deposit is often equal to one or two months' rent when moving to a new rental.
- When renting a place to live, an individual will need to sign a lease.
Managing Finances
- Creating minimum savings goals before buying 'wants' can help prioritize needs over wants.
- Deciding a maximum amount to spend each week can help manage finances and achieve financial goals.
- Accruing interest typically indicates that money is being borrowed and not paid back promptly.
Banking and Account Management
- If an account balance is negative, an overdraft fee may be charged.
- Not all purchases may show up on an account statement, depending on the timing of the statement.
- Regular deposits can increase an account balance.
Test your knowledge of budgeting and debit cards with this answer key for the BANZAI TEEN pre and post test. Find out the correct answers to questions about creating a budget and understanding how a debit card works.
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