Everfi Test 2023 with 100% correct questions and answers

What are the different types of banking institutions? retail, credit union, online How is a checking account different than a savings account? savings account has lower liquidity How can you monitor your checking account balance and what are the risks of spending more money than you have? monitor online What is interest? How is interest different from compound interest? interest= the fee someone pays to be able to borrow money difference from compounding= you earn interest on your interest Why is it important for young people to start saving as early as possible given the principles of interest? the longer the money is in the account the more the interest builds What is the purpose of a budget? to not spend more money than you have How can people make sure their budgets remain balanced? budget for what you need and not what you want What is credit, and how can it be useful to consumers? to gather good and services before payment What features of a credit card do you need to research when considering a credit card? your interest online How can people make sure they are using credit cards responsibly? checking their credit score What is the difference between a debit card and a credit card? debit cards take money directly out of the account credit cards is borrowing money that you pay in full at the end of each month What information goes into a credit score, and what information does not? Goes in- payment history, amounts owed, length of credit history Does not- paying late phone bill Why would you want a good credit score? How are credit scores used? If you have a good credit score it can help you get loans for buying houses or cars What can you do to help make your credit score strong? pay your bills on time, check your credit score What can you do if you have a low credit score, to help increase it? You can charge less amounts to the card so it is easier to pay back on time. You can review your credit card bill online or close out an old credit card How is education an investment in yourself? Return on investment. This gives each person a better chance of higher earnings Explain why it might be a good idea to borrow money for college if you might not otherwise afford to go. A bachelor's degree in college has a 160% return on investment What are the steps in the student loan process? Grants/scholarships, Federal student loans, Private loans Why is it important to repay your student loans on time? Student loans must be paid, or your credit score will drop dramatically, making it very difficult to receive future loans What is a mortgage? A loan people take out in order to pay for a house What causes a mortgage foreclosure? When you don't pay back the loan in a timely manner What are the advantages of renting vs. owning a home? What are the advantages of owning vs. renting a home? Renting= cheaper short term, more flexible, more expensive long term Owning= cheaper long term, less flexible Is buying a house always a solid investment? no, the price will fluctuate over time What is tax revenue used for? taxes you pay are used by the government to invest in technology and education and to provide goods and services for the benefit of the American people ex. medicare & medicaid What is the difference between sales tax and property tax? property- tanglible property sales- purchases What types of insurance do people use and what are the benefits to having insurance? Life- covers death expenses Health- medical needs Auto- Protects vehicles How does one pay for insurance? You pay a monthly premium to maintain coverage What is identity theft, and what can people do to protect themselves from it? When someone who is NOT you gets access to your personal financial information and can steal your money don't share personal information Why should people check their credit report once a year? To see if they're being charged for anything they didn't buy What are some examples of consumer fraud? Fake charities/lotteries Why do people take financial risks? to gain money What is a stock, and why might stocks be a good investment? A stock is a part of a company that people buy What is a mutual fund and how is it different than stock? Mutual funds is a bond and stock combined together How are bonds different than stock? How does their risk profile differ? Bonds are lower risk because they pay a fixed amount each year, whereas stocks are uncontrollable How can you lower risks when it comes to investing? Invest in safe companies with long track records