Personal Finance

What is the difference between cash and credit?

• Cash is money you borrow, but have to pay back, while credit is money you have immediately to use.

• Cash is only used to save in a bank, while credit is used to pay for goods and services.

• Cash is money that grows on trees like leaves, while credit is money that you receive in the mail.

• Cash is money you have immediately to use, while credit is when you have to borrow money and pay it back to someone.

Why would someone need to use credit?

• When there are not enough workers to do a job.

• When there is not enough cash to pay for an immediate need or want.

• When there is extra money to pay off bills.

• When there is exactly how much money needed to pay for something.

When you use a credit card, what are you really doing?

• You are lending money to a bank or business.

• You are earning interest on the money.

• You are saving the money for a rainy day.

• You are borrowing money from a bank or business.

When you borrow money, you are expected to pay the money back plus additional money. What is that additional money called?

• Inflation

• Interest

• Capital

• Savings

Why should you pay a loan back quickly?

• You will owe less interest.

• You will earn more interest.

• You will owe more interest.

• You may lose your job.

What is a budget?

• A tool used to calculate taxes.

• A tool used to track and plan for income and spending (expenses).

• A tool used to plan for building a house.

• A tool used for calculating how much savings interest can be earned

Below is a list of Jackie's financial activities for a week.

What activities would be considered expenses for Jackie? Check all of the ones that are expenses.

• She earns $25 for pet-sitting.

• She gives a friend a $20 gift card for their birthday. (What a good friend!)

• She spends $10 on a new t-shirt. (Where on earth did she get a $10 shirt from?!)

• She spends $10 on pizza. (Must be Marco's Pizza. Yum.)

• Her parents give her $30 for doing extra chores around the house. ($30?!!!! That's a lot!!)

Below is a list of Jackie's financial activities for a week.

What activities would be considered income for Jackie? Check all of the ones that are considered income.

• She contributes $5 to a class party.

• She spends $20 on movie tickets and snacks

• She spends $10 on a new t-shirt.

• She earns $25 for helping a neighbor do some gardening.

• Her parents give her an allowance of $25 for the week.

Jackie usually earns $60 a week, but usually spends $30 a week. How much can Jackie save in a month (4 weeks)?

• $30

• $90

• $60

• $120

Jackie realizes it will take her 5 months to save for her new phone. She wants to purchase it within at least 3 months. What are the ways she can adjust her budget to purchase it sooner? Check all that apply.

• She can decrease her expenses.

• She can increase her income.

• She can increase her expenses.

• She can decrease her income.