Personal Finance Final

The strategy of saving money before spending it is called

pay yourself first.

The 50-30-20 rule means: 50% of income goes to

needs

The 50-30-20 rule means: 30% of income goes to

wants

The 50-30-20 rule means: 20% of income goes to

savings

A fund set aside for unexpected expenses is called an

emergency savings fund.

A regular monthly expense that stays the same, such as rent, is called a

fixed expense.

An expense that can change from month to month, such as electricity, is a

variable expense.

Using a _____ reduces your checking account balance immediately.

debit card

Writing a check does not reduce your balance until the check is

cashed/cleared

Money added to your bank account is called a

deposit

The total amount of money earned before deductions is called

gross pay

The amount of money you take home after deductions is called

net pay

Money taken out of your paycheck for taxes and benefits is known as

withholding

The tax form you fill out when starting a job to determine withholding is the

W-4 form.

The form you receive from each employer showing your yearly earnings is the

W-2 form.

The federal income tax return is filed using the

1040 form.

The deadline to file taxes is

April 15.

You are required to pay income taxes when you earn more than the

minimum income requirement.

Mandatory government spending includes _____ and _______.

social security and medicare

The monthly payment for insurance coverage is called a

premium

The amount you must pay before insurance begins to cover costs is the

deductible

The percentage of costs you pay after meeting your deductible is called

co-pay.

Insurance that protects your personal belongings in an apartment is

renters insurance

Auto insurance that covers theft or vandalism is called

comprehensive coverage

The best time to start saving for retirement is

as soon as you have your first full time job

Money placed in the stock market to grow over time is called

investing

Earning interest on both your savings and previously earned interest is known as

compound interest

Generally, higher investment risk leads to a potential

higher return

Spreading money across many investments is called

diversification

The two most important factors in a credit score are ______ and ______

payment history and total debt

Using less than ___ of your available credit helps your credit score

30%

Making ______ is the best way to improve a credit score

on time payments

Your credit report does NOT include your

salary

Paying extra on a loan reduces the

principle

The best strategy to minimize interest is paying off debts with the _______ first.

highest interest rate

The three major credit reporting agencies are ________________________, ________________________, and ________________________

Equifax, Experian, and TransUnio

The most responsible budgeting order is:

needs, savings, High-priority wants, low-priority wants

Personal Finance __________ a high school graduation requirement in Connecticut

is