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Money Flashcards | StudBud

What is a financial red flag?

What is compound interest?

Money

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Questions 8

Answers

1
What is compound interest?
Interest added to your original money and past interest
Interest added only once
Interest charged on your loans
2
What is a financial red flag?
Saving 10% of your income
Setting automatic transfers to your savings account
Using a credit card without knowing the interest rate
3
What type of investment is usually best for beginners?
Stocks only
Mutual funds or ETFs
Yourself-education and skills
Real estate
4
What is a key difference between saving and investing?
Saving is usually for safety; investing is for long-term growth
Saving always earns more money than investing
Investing has no risks, saving does
5
What does financial literacy mean?
Knowing how to use credit cards only
Spending money freely
Managing money wisely and making smart financial decisions
6
What is a risk of “Buy Now, Pay Later” plans?
Paying everything in cash
Overspending and missed payments
Avoiding interest forever
7
Which of these saving options earns interest?
A checking account used for daily spending
Keeping cash in a jar
Savings account at a bank
8
According to the 50/30/20 rule, what should 20% of your income go toward?
Entertainment
Debt, savings, and investments
Rent and groceries