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Personal Financial Literacy Mid-Term Review by Mrs. Chyko

Understand inflation, economy, pricing strategies, job market changes, skills, income concepts, tax forms, goal setting, advertising, decision making, time management, budgeting, financial planning, and identity theft.

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Personal Financial Literacy Mid-Term Review by Mrs. Chyko

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  1. Personal Financial Literacy Mrs. Chyko Mid-Term Review

  2. 1. List and define the 3 types of inflation. • Reflation - Occurs when prices are high, drop, and then rise to their previous level • Disinflation - Occurs when prices are rising, but at a slow rate • Hyperinflation - Rapidly rising, out-of-control price increases

  3. 2. Describe the characteristics of a growing economy • Lots of jobs • People are spending money • Financial security is easier

  4. 3. List and define the 3 causes of inflation • Cost Push-The cost to create the product rises and is NOT offset by productivity • Demand Pull-Consumers want to buy more goods and services than producers supply • Real Cost-Resources diminish or become harder to get

  5. 4. List and define the 3 types of pricing strategies • Market Based • Value Based • Cost-Plus

  6. 5. Explain the impact inflation has on our purchasing power • Inflation REDUCES our purchasing power • As prices rise our income does NOT • Consumers cannot buy as much with the same amount of money

  7. 6. Explain why the job market changes overtime • Peoples needs and wants change • Need for different types of workers evolve • Technology changes

  8. 7. Explain the difference between hard skills and soft skills • Hard skills are technical skills • Working machinery, nursing procedures • Soft skills are people skills • Communication, team work, leadership

  9. 8. Define tuition. • The charge for instruction at a school • Community college, State college, Trade school • Government loans, grants, scholarships, job

  10. 9. Difference between required deductions & optional deductions. • Required - Income tax, Social Security tax, and Medicare tax • Optional – Insurances, Savings plan, Retirement plan (401K)

  11. 10. Difference between disposable income and discretionary income • Disposable – Income after Taxes are paid • Discretionary – Income after needs are met

  12. 11. Define 1040EZ Form • Form used to process taxes • NO DEPENDENTS • Can be used by single and joint filers

  13. 12. List the five components of a SMART Goal • Specific • Measurable • Attainable • Realistic • Time-bound • To help us think our goals through

  14. 13. Define advertising • Method of informing or persuading consumers • Promoting and selling products

  15. 14. Examples of advertisements: • Media – TV, radio • Internet – Pop up windows • Print– Newspaper, flyers • Direct – Sample of product

  16. 15. The 6 steps of the Decision Making Process • Define problem or need • List options • Compare options • Make decision • Take action • Revaluate

  17. 16. The importance of Time Management. • List 5 characteristics of Time Management 1. PRIORITIZE 2. BREAK DOWN LARGE PROJECTS INTO SMALLER ONES 3. MAKE A TO-DO-LIST 4. USE A DAILY PLANNER 5. WORK WHEN YOU ARE MOST RODUCTIVE

  18. 17. Explain the difference between ECONOMIZING and OPTIMIZING • Economizing – save as much possible; spend only when necessary • Optimizing – spreading money as far as it will go. Get the most value for the money spent

  19. 18. An individual that can qualify as an EXEMPTION • YOU Pay for more than 50% of a persons living expenses. • The individual cannot be claimed by anyone else.

  20. 19. Difference between a personal goal, financial goal, & financial plan • Personal goal – things you want to achieve • Financial goal – how you will pay for your personal goal • Financial Plan – Contains personal goals and a timeline for reaching these goals and methods you will use to finance them.

  21. 20. Explain the benefit of utilizing a Pay-Yourself- First Budget • Requires you to save money first!! • Income = Savings + Expenses

  22. 21. Explain how to calculate the dollar variances on your budget • Determine the difference between actual and planned dollar amounts.

  23. 22. Explain favorable variance and unfavorable variance • Favorable Variance – Earn or save more than planned and spend less • Unfavorable Variance – Earn or save less than planned and spend more

  24. 23. 3 Items you would gather & analyze for financial planning • Personal budget, checkbook, and current pay stub

  25. 24. Explain the difference between identity theft and phishing • ID Theft - Act of using someone’s personal information without permission to commit fraud or crime • Phishing – Scam used to get individuals to give out personal information

  26. 25. Demonstrate payroll processby calculating: • - Regular pay • - Overtime rate per hour • - Overtime pay • - Gross pay • - Required deductions • - Optional deductions • - Net Pay

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