3 rd 9 Weeks Benchmark Review Career Preparedness

Key Terms Direct Deposit- a method of paying employees where employers directly deposit the employee’s paycheck into the authorized bank account.

Key Terms Taxes- fees placed on income, property, or goods to support government programs.

Money Market Account- a type of checking and savings account issued by a bank or credit union to hold your Key Terms

Compound Interest- the practice of figuring interest earnings on both the original amount and any previous interest that has been added to the balance.

Key Terms Bad Check- a check that has been dishonored because of insufficient funds.

Key Terms Form I-9- the Employment Eligibility Verification Form. This form is a U.S. Citizenship and Immigration Services form. It is used by an employer to verify an employee’s identity and to establish that the worker is eligible to accept employment in the United States.

Key Terms Savings Account- a deposit account that earns interest and is issued by a bank or credit union. 529 Savings Account- a savings account designed specifically for educational expenses.

Key Terms Debit Card- using this card, money is directly taken out of your bank account. Form W-2- the wage and tax statement. This form states the amount of money earned and taxes paid throughout the previous year.

Key Terms Commercial Bank- the most common type of financial institution-privately owned, offering a wide range of services, and run to make a profit. Cleared- refers to a check that has been honored and processed.

Key Terms Form W-4- a form completed by an employee to indicate his or her tax situation to the employer. The form tells the employer the correct amount of tax to withhold form an employee’s paycheck.

Key Terms Interest- the cost of using money paid by banks to their depositors and paid by borrowers to the depositors that provide their loan. Rule of 72- a simple way to estimate the effect of interest rates. Dividing 72 by the interest rate will tell you approximately how many years it will take to double your investment.

Key Terms Internal Revenue Service (IRS)- the government agency in charge of taxes.

Key Terms Checking Account- account that you can deposit your money and withdraw money without a fee. Credit Union- nonprofit financial institutions that are owned by their members and organized for the member’s benefit.

Key Terms FICA- the acronym used to refer the combination of Social Security and Medicare taxes. Retirement Account- an account such as an IRA or 401 (k) that helps you set aside money for retirement.

Key Terms Bank Service Charge- a fee incurred for the expenses associated with checking account transactions. Certificate of Deposit- a savings alternative in which money is left on deposit for a stated period of time to earn a specific rate of interest.

Key Terms Overdraft Protection- a checking account feature in which a person has a line of credit to write checks for more than the actual account balance. Gross Income- the total amount of money earned before payroll withholdings are deducted.

Key Terms 1040EZ-tax return form commonly referred to as the short form.

Need to Know! During a month, a person should only spend 31% of their income on monthly expenses.

Need to Know! Your entire bill should be paid on time each month. It is not okay to skip payments.

Need to Know! When you get a loan, you should pay that loan back in full. If you default on your loan, you will not be able to get another loan from another lender.

Need to Know! A credit score is important because it can have an impact on whether or not you can finance major purchases, determine whether you can get credit cards, and affects the interest rate if you finance a car or home.

Need to Know! To improve your credit score, it is best to pay down your debt to at least 25% or less of each credit card limit.

Need to Know! A person can get a free credit report once a year.

Need to Know! If you pay more than the minimum balance on your credit card each month then the total amount of interest and principle will decrease.

Need to Know! Saving $1,000 per year for 10 years at an 8% interest rate would give you $2, – $1, – $1, – $1, – $1, – $1, – $ – $1, – $1, – $1, – $2,158.94

Need to Know! You income is taxed 6.2% for Social Security.

Need to Know! When you have a negative balance in your checking account of -$65.00 but you receive your paycheck of $450, then your new balance would be $385..

Need to Know! You income is taxed 1.45% for Medicare.

Need to Know! Your emergency fund should always have enough to cover six months of living expenses.

Need to Know! If you pay the minimum amount, pay less than the minimum amount, and miss a payment on your credit card, you will be paying more interest over time.

Need to Know! A budget is when one makes a plan of their expenses to be less than or equal to their income.

Need to Know! According to Federal law, a person must pay $50 when their credit card is stolen and they have notified the card issuer.

Need to Know! A credit report has your current balance and payment history. Your income does not appear on your credit report.

Need to Know! The best way to improve you’re your credit score is paying your bills on time.

Need to Know! Ways to maintain your credit score are to maintain your older credit cards, pay all of your bills on time, and keep your credit card balances under 30% of your credit limit

Need to Know! By earning a four year degree a person could expect to earn much more than 70% more than a person with only a high school diploma.