2. Personal Financial Literacy What do you know?

3. Is the $1000 her gross or net income?gross net 1. Janie gets a check after her first two weeks at work, but is bummed that it’s only $840. She thought it was going to be $1000!

4. Well done for #1! The total amount you make is the gross. Continue Continue

5. Sorry, that’s not right for #1. The gross is how much you make before other things are taken out. Continue

6. Are these subtractions called exemptions or deductions? exemptions deductions 2. The reason Janie’s check is smaller than she thought is that certain things were taken out first – federal income tax, health care, and FICA, to name a few.

7. Well done for #2! Deductions are deducted from your check! Continue Continue

8. Sorry, that’s not right for #2. Exemptions are things you don’t have to pay taxes on (like dependents), but deductions are deducted from your paycheck. Continue

9. Social Security and Medicare Social Security and Medicare or federal and state income taxes ? federal and state income taxes 3. One of the deductions is FICA. What’s that?

10. Well done for #3! BTW: FICA deductions are mandatory. ContinueContinue

11. Sorry, that’s not right for #3. FICA (SS & M) taxes are mandatory deductions from your paycheck. Continue

12. Gross Gross or net ?net 4. Is your “take home pay” – that is, the amount on a paycheck – gross income or net income?

13. Well done for #4! Net = take home pay. ContinueContinue

14. Sorry, that’s not right for #4. Net = take home pay. Gross = total before deductions. ContinueContinue

15. True True or false ?false 5. Federal income tax rates are set by Congress, but state income tax rates differ from state to state.

16. Well done for #5! FYI: some states like Texas have no state income taxes. ContinueContinue

17. Sorry, that’s not right for #5. Net = take home pay. Gross = total before deductions. ContinueContinue

18. Are sales taxes like this considered regressive or progressive ? regressive progressive 6. When you buy a shirt at Northgate, you pay a sales tax of 7.5%. Some people criticize this tax because it’s the same for rich and poor people, and ends up taking a bigger chunk of money from the poor.

19. Well done for #6! BTW: Income taxes are progressive because people with more income pay a higher % in tax. ContinueContinue

20. Sorry, that’s not right for #6. Regressive = fixed %, hurt the poor more. Progressive = variable %, hurt the rich more. ContinueContinue

21. 7.Does this person  want more progressive or more regressive taxes? progressive regressive

22. Well done for #7! Anyone saying that the richest 1% doesn’t pay enough taxes is arguing for progressive taxes. ContinueContinue

23. Sorry, that’s not right for #7. Progressive = variable %; the more you make, the higher your tax % (hurts the rich more). ContinueContinue

24. True True or false ?false 8. When you use a debit card, the amount gets deducted from your checking account almost immediately.

25. Well done for #8! If you don’t have enough in your checking account, don’t swipe that debit card. Continue

26. Sorry, that’s not right for #8. Debit card charges are deducted right away – but credit card charges aren’t. Continue

27. What’s that penalty called - fine or fee ?finefee 9. Zee paid for her purchase at Walgreen’s with her check, but when she didn’t have enough in her account, the bank returned her check and both the bank and Walgreen’s charged her a penalty.

28. Well done for #9! Fees are issued by banks and credit card companies; fines are issued by the govt. as a punishment (like a speeding ticket). Continue

29. Sorry, that’s not right for #9. Fees are issued by banks and credit card companies; fines are issued by the govt. as a punishment (like a speeding ticket). Continue

30. What was Zee’s offense – floating a check or bouncing a check ? floating a check bouncing a check 10. (From #9) Zee paid for her purchase at Walgreen’s with her check, but when she didn’t have enough in her account, the bank returned her check and both the bank and Walgreen’s charged her a fee.

31. Well done for #10! Bouncing a check is bad; floating one is normal (we can talk about floating later). Continue

32. Sorry, that’s not right for #10. Bouncing a check is bad; floating one is normal (we can talk about floating later). Continue

33. Mutual fund Mutual fund or savings bond ?savings bond 11. Which is safer: investing in a mutual fund or a US savings bond ?

34. Well done for #11! A US savings bond is guaranteed by the US govt.; a mutual fund has no guarantee. Continue

35. Sorry, that’s not right for #11. A US savings bond is guaranteed by the US govt.; a mutual fund has no guarantee. Continue

36. Mutual fund or corporate bonds ? 12. Yi wants to invest in the stock market, but doesn’t want to “put all of his eggs in one basket.” Which should he pick? SORRY – for the rest, there is no right or wrong feedback. Please go through them – and we’ll review in class.

37. Is Mya’s last sentence correct? 13. Mya’s wanted to give her granddaughter $5,000 when she was born, but instead of safely putting it into a bank account, she wanted it to grow a lot over time. She said “Sure, it could all be gone one day, but I don’t mind the risk. On average I’ll get a higher return in stocks than in buying a Treasury bill.”

38. CD or stock? 14. Which is safest: buying a CD (certificate of deposit) from an FDIC-backed bank, or buying 10 shares of Wal-Mart stock?

39. Collateral score or FICO score? 15. “The best way to improve your ______ is to pay your bills on time and reduce your debt.” What goes in the blank?

40. Sorry, that’s not right for #15. Fees are issued by banks and credit card companies; fines are issued by the govt. as a punishment (like a speeding ticket). Continue

41. Current amount or minimum amount? 16. This is a snapshot from a credit card bill showing both the current (total) and minimum amounts due. Paying which one avoids interest charges?

42. Your credit history or the types of credit you have ? 17. What’s the biggest % in determining your credit score?

43. If he can get unsecured credit, or what the loan’s interest rate is ? 18. Raj wants to buy a house. He has saved up for a down payment, and knows he needs a mortgage loan (because he can’t pay for the house all at once.) What does he need to know about the loans he is considering?

44. Credit union loans or payday loans? 19. These loans are very short-term, and can have interest rates as high as 400%

45. Consumer Protection Comission or Federal Trade Commission? 20. This is taken from the website of the US government agency that enforces consumer protection. What name is under that black bar?

46. Things that are sneaky but legal, or fraud ? 21. A Ponzi scheme, forgery, and false advertising are all examples of what?

47. True or false ? 22. When buying a home, the larger your down payment you can make, the lower your monthly mortgage payments will be.

48. Is this amount the deductible or premium ? 23. When you have an accident, the amount of car insurance you pay each month may increase.

49. You can never borrow money again, or You may be able to borrow money later, but at higher rates. 24. If you declare yourself bankrupt, which is true?

50. True or false ? 25. When investing your money, you are really hoping for a higher rate of return than when you save.