Financial Literacy

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What is financial literacy?

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Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing.

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How much money should you save for emergencies?

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3-6 months worth of expenses.

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What is the difference between a want and a need?

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A need is something necessary to live, while a want is something that is desired but not essential.

Tags

CCSS.RI.7.2

CCSS.RI.8.2

CCSS.RL.11-12.2

CCSS.RL.8.1

CCSS.RL.9-10.2

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What is saving?

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Saving is setting aside money for future use, typically for emergencies or specific goals.

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What is investing?

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Investing is using money to purchase assets with the expectation of generating a return or profit over time.

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What is compound interest?

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Compound interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.

Tags

CCSS.7.RP.A.3

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Why is compound interest more beneficial than simple interest?

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Your money grows faster when it is compounded.

Tags

CCSS.7.RP.A.3

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What is a Roth IRA?

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A Roth IRA is a retirement savings account that allows you to pay taxes on your money before you invest it, and then your money grows tax-free.

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What is a Traditional IRA?

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A Traditional IRA is a retirement savings account that allows you to deduct contributions from your taxable income, but you pay taxes on withdrawals in retirement.

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What is the purpose of a budget?

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A budget is a plan that helps you track your income and expenses to manage your finances effectively.