Banking, Budgeting, Taxes

Question 1

Outstanding check

Answer 1

• Check that has been written, listed in your register, but not yet cashed on the receiving end
• Why maintaining your checkbook is important

Question 2

Cancelled checks

Answer 2

Outgoing check that has been cashed and cleared by the bank

Question 3

Credit union

Answer 3

Member owned and controlled financial institution

Question 4

Fixed expenses

Answer 4

Bills that are the same amount every month are called what?

Question 5

If a check is made out to cash, who can cash it?

Answer 5

Not made out to anyone individually. Instead of a persons name you just write “Cash”.
Whoever has it can deposit it

Question 6

When putting together a budget you should always pay yourself first, or have a savings category. How
much should you being putting into this account?

Answer 6

-10%

Question 7

4. If a check has a different amount written in words and a different amount written numerically what
   happens?

Answer 7

Word value is taken

Question 8

What is a stop-payment order?

Answer 8

stop a check from going through before it is processed

Question 9

Checks more than 6 months old do banks have to honor (cash) it?

Answer 9

No

Question 10

Give examples of fixed expenses?

Answer 10

Regularly paid expenses Generally the same each time period Rent, insurance, car payments, etc.

Question 11

Give examples of variable expenses?

Answer 11

Expenses that fluctuate depending on consumption Food, gas, entertainment

Question 12

Checks listed in your check register but do not appear on your bank statement are known as:

Answer 12

Outstanding checks

Question 13

The FDIC insures deposits on all savings accounts up to _____

Answer 13

$250,000

Question 14

When using a _____________ the amount of your purchase is automatically deducted from your
checking account.

Answer 14

Debit card

Question 15

. At the bottom of the check there are two sets of numbers. What are they? How many digits do each
have?

Answer 15

Routing number and bank number
Routing first
Routing (7 numbers) Bank account number is 9

Question 16

What are advantages of online banking?

Answer 16

Connivence

Question 17

Restrictive endorsement

Answer 17

A check that is endorsed with the words “For deposit only”

Question 18

Direct deposit

Answer 18

-Provides the convenience and safety of having your payroll

check electronically placed into the bank account(s) of your choice.

Question 19

0. What three resource pools should be used to handle an unexpected expense? What is the order that
   they should be used?

Answer 19

1. Look to see if insurance covers it
2. If insurance doesn’t cover all of it, savings or emergency fund
3. Use credit. Don’t take out loans bc they get interest

Question 20

Approximately how much of your net income should be used for housing expenses?

Answer 20

24-35%

Question 21

Budgeting allocation for the categories

a. Housing
b. Transportation
c. Life/Other
d. Debt Repayment
e. Savings

Answer 21

Housing:24-35%
Insurance: 10-15%
Food:10-15%
Transportation:10-15%

Savings: 10%
Other utilities:5-10%
Entertainment: 5-10%
Personal p: 5-10

Question 22

What is a W2? When should you receive it?

Answer 22

• received in January
• There one of me for every job I work
• You can tell how much you earned and how much you paid in taxes by reading me

Question 23

Which states do not collect income taxes?

Answer 23

Florida, Texas, Oregon

Question 24

What is APR?

Answer 24

Annual percentage rate- how much you pay in fees over the course of a year without taking into
account compound interest

Question 25

What is APY?

Answer 25

Annual percentage yield- includes how often interest is applied

Question 26

Is APR or APY higher

Answer 26

Higher than APR. factors in compound interest

Question 27

What does a debit card do?

Answer 27

Takes money directly out of your checking account

Question 28

Give an example of three products that might have an excise tax.

Answer 28

cigarettes, alcohol, gasoline and gambling

Question 29

. Taxes are due to the IRS by when?

Answer 29

April 15

Question 30

What does claiming 0 on your W4 mean?

Answer 30

0 dependence, no children. You pay more taxes

Question 31

When do you fill out your W4?

Answer 31

When you are starting your job

Question 32

Why does it matter what you claim on your W4?

Answer 32

W-4 comes before. When you are starting your job. Allowances, dependence, deductions.
It will matter if there is a lot taken out of your paycheck or not as much. Feb March April, you
get a big check. If not a lot taken out, you may owe money in April or not get a lot back.

Question 33

FICA

Answer 33

Federal insurance contributions act. The money taken out of worker’s paychecks to pay older Americans their social security
retirement and Medicare.

Question 34

YTD

Answer 34

Year to date. Reflects everything you’ve earned since Jan 1 to the current date.

Question 35

A member owned and controlled financial institution is known as what:

Answer 35

credit union

Question 36

Can charitable donations be used to lower your taxable income

Answer 36

Yes

Question 37

Can interest on student loans be used to lower your taxable income

Answer 37

Yes

Question 38

Can interest on savings account be used to lower your taxable income

Answer 38

No

Question 39

Can property taxes be used to lower your taxable income

Answer 39

Yes

Question 40

What is net income

Answer 40

Income after the taxes are taken out

Question 41

What is a special endorsement

Answer 41

A check that is sign over to another person

Question 42

As a consumer, most bills arrive on a_____ basis

Answer 42

Monthly

Question 43

What are some possible deductions from your paycheck

Answer 43

• Payroll taxes

- 401 K contribution