Personal Financial Literacy Final Exam Study Guide
Topics on Test:
Rule of 72
Decision making process (Steps)
Financial planning process (Steps)
SMART Goals
Risk to return relationship – higher the risk higher the return
Time value of money
Future value of a dollar
Investment reward based on risk
Difference between investing and savings
Why would someone diversify investments?
Personal investment choices – including investment type, why and how it relates to your goals
Types of Credit – Credit Cards, Mortgage, Student loan, Installment Loan
Information needed to apply for credit
Risks & Rewards of using credit
4 C’s of Credit
Ways to hurt and help your credit score
Bankruptcy – Chapter 7 & Chapter 13
How to complete a deposit slip
Bouncing checks
How to write a check
How to record in a check register
How to balance a checkbook
Difference between debit and credit cards
Financial Service Fees
Creating a personal budget
SMART Goals and budgeting
Benefits of tracking your spending
Types of financial documents you should keep on file
Time frame of a budget
Is a budget set in stone?
What is PYF?
What is the purpose of Insurance (shifts possible financial loss to another person)
Risk Management methods: Avoid, Reduce, Accept and Share (insurance)
What Information do you need handy to apply for insurance (do not need employer info)
Driving down insurance costs: Deductable is $ you pay before insurance begins to pay
Auto Insurance and premium factors (type of car etc.)Color does not affect premium
Collision covers car crash damage
Liability covers damage to others and their property
Making sure you are covered
What happens if you have an accidentwho makes the repair estimate (claims adjuster)
Six Basic Types of insurance: Auto, Home (Property), Life, Liability (lawsuit protection), Health and Disability
Health coverage for full time students on parents policy (to age 26)
Insurance Deductable and affect on premium (high deductable means lower premium)
Insurance Claim (Auto): need police report, insurance policy, witness notes and location info.
Insurance types usually offered by employer (Health and Disability)
Ways to stay on track with your budget
Is your budget balanced?
Advantages of creating a budget
Types of income
What is a W-2 Form?
What is a W-4 Form?
How to read a stock table
How to calculate a stock purchase / sale
Vocabulary:
Financial planning
Risk
Part time job (less than 40 hours per week)
Hourly wage (dollar amount paid for each hour worked)
Risk management
Insurance
Insurance policy
Premium
Deductable
Conditions
Needs
Wants
Values
Goal
SMART
Short-term goal
Intermediate-term goal
Long-term goal
Delayed gratification
Cash flow
Opportunity cost
Satellite decision
Variable expenses
Spending and Savings Plan
Net Income
Payroll deductions
P.Y.F
Income
Gross income
Fixed expense
Credit
Interest
Principal
APR
Annual Fee
Credit Limit
Origination fee
Finance Charge
Loan Terms
Grace Period
Over the limit fee
Late fee
Credit Report
Credit History
Credit Score
Universal Default
Debt
Compounding
Diversification
Interest
Investments
Rate of Return
Rule of 72
Savings Account
Stock
Time Value of Money
Bank
Credit Union
Savings account
Share account
Automated teller machine (ATM)
Checking account
Share draft account
Endorsement
Debit card
Personal identification number (PIN)
Online Banking
Electronic funds transfer
Identity theft
Phishing
Free software or freeware
Spyware
Transferable skills (come from where)
It costs an employer what percent of your Earnings to provide Benefits to you?