Budgeting Questions Flashcards
What are the six steps to budgeting
Calculate your net income
Track your spending
Set realistic goals
Make a plan
Adjust your spending to stay on budget
Review your budget regularly
Five types of banks
Federal bank- Bank of Canada
Banks- RBC, TD, CIBC
Credit unions- innovation, affinity, conexus
Trust companies- trust funds, estates and executioners of wills
Online banks- manulife, simplii financial, tangerine
Difference between a formal and informal trust
Formal trust needs a deed of trust while an informal doesn’t
What to consider when choosing a bank
Location, fees, interest, ATM availability, features, direct deposit, automatic payments, online banking, discounts/ cash back features, credit card incentives, student features, bonus incentives
Key differences between a credit union and regular bank
Banks: for profit, owned by investors, regulated by government of Canada, large selection of products and services, newer technology, higher rates on loans, low interest rates, more fees
Credit unions: not for profit, owned by their members, can choose to be federally regulated, are regulated by provincial and territorial governments, vote among members to elect a board of directors, less products, better interest rates, less fees, membership fee to get started
Three parties of a trust account
Grantor: person with assets that creates the trust and determines how much is paid out and how often
Trustee: person who administers the trust portfolio according to the rules lain out by grantor. Trustee can be the grantor or another trusted individual
Beneficiary: person who receives the assets
Difference between a revocable and irrevocable trust
Revocable trust can be changed once it is established and an irrevocable cannot
Describe a situation in which you may need to use or want to receive a bank draft instead of a personal cheque
If you’re making a major purchase, like a down payment on a house, this locks the funds so they are guaranteed to be available
What is the difference between a credit and debit card
A debit card uses your own money and a credit card uses the financial institution’s and you pay them back later
What would determine if your account had a hold on it after depositing a cheque
Large amount of money- over $200
The account of the person who gave the cheque was recently opened, deposit amount is unusual for account history, and if the account has a frequent history of overdrafts
Safety tips for writing cheques
Make sure cheque is written in permanent ink, use whole line, use decimal points, and sign the cheque
