Which reason BEST explains the difference in salary among these professions?

Use the table to answer the question. 

Which phrase BEST explains the difference in salaries between these occupations?

An extended warranty is a promise from the warranty company to pay for some repairs or services after the manufacturer’s warranty expires. An extended warranty is not included in the price of the car. It costs extra. An extended warranty is sometimes called a service contract.

- "Buying a Used Car," Federal Trade Commission

How does making the decision to spend extra money on an extended warranty at the time of purchase help an individual financially in the long term?

Based on the text, how can joining the military contribute to a person’s financial well-being?

Many graduates choose to go to a community college or a trade school after graduation to save money on tuition. Typically, a trade school program takes two years to complete and ends with an apprenticeship in the student’s chosen trade to provide hands-on training.

How does the decision to go to a trade school rather than a university affect the long-term financial goals of an individual?

Since 1944, the GI Bill has helped millions of veterans pay for college, graduate school, and training programs. Under this bill, qualifying veterans and their family members can get money to cover all or some of the costs for school or training. - “GI Bill,” U.S. Department of Veterans Affairs

Based on the text, how can enlisting in the military affect an individual’s financial plan and future goals?

Option X: Spend $44,000 on tuition for a four-year degree at an in-stateuniversity immediately after high school.

Option Y: Work full-time at a local restaurant for two years after graduating high school, then attempt to obtain a higher-paying job.

Based on the text, what is the opportunity cost of an individual choosing Option Y?

This chart indicates unemployment rates for individuals with different levels of education, ranging from “less than a high school diploma” to “doctoral degree.” It also indicates median weekly earnings for each level of education.

Based on the chart, what effect does education have on the salary and employment of individuals?

What is the BEST explanation for the drop in “Money Spent on Entertainment” in September?

According to an AARP estimate, a person must have $1.18 million in savings in order to retire, including $40,000 in income for the first year of retirement. Adding money occasionally into a savings account is not the most effective method for saving. Also, buying every stock and bond on the market will not always achieve the desired results. People must start out early in their careers with a plan in mind. While this may be difficult, it will help to ensure that one can comfortably retire.

Based on the text, how do fiscally responsible individuals make sure they are saving enough money for retirement?

It’s helpful to set short and long-term financial goals and manage your money to meet them. . . .

A good way to take control of your spending is to set the maximum amounts you plan to spend each week or each month. Once you’ve set the maximum, stick with your plan. . . .

Be careful not to let a sale or discount coupon persuade you to purchase something you don’t really need and that isn’t in your spending plan.  - “Spend,” MyMoney.gov

Based on the text, what is the effect of setting limits on personal spending?

Based on the chart, which statement describes an action that a fiscally responsible individual could take to stay within this budget?

Since starting a full-time job, a woman has been unable to achieve one of her financial goals: to establish regular savings. However, she has just gotten a raise at work that adds an additional $300 a month to her income.

How can the woman incorporate the raise into her budget to reach her financial goal?

How would following this budget most likely affect the individual?

You might open a checking account:

- to keep your money safe

- to pay using a debit card or check, instead of cash

- to get cash from an automated teller machine, or ATM

-to pay your bills online using your checking account . . .

- to earn a little extra money. Some banks pay interest on money in checking accounts.

Based on the text, what is one purpose of opening a checking account in establishing financial well-being?

You go to a financial institution to open a checking or savings account and a representative says you aren’t eligible. Why? Because a report shows that an institution previously closed your checking account, perhaps because of unpaid overdrafts.

Based on the text, what is the relationship between how a person manages a checking account and the ability to open other accounts in the future?

People use automatic payments set up with a merchant or other service provider to pay bills and other recurring payments from their bank or credit union accounts. This could be for utility bills, credit card bills, monthly fees for childcare, gym fees, car payments, or even a mortgage. Such automatic payments can be a convenient way for people to make sure they pay their bills on time. Some lenders offer an interest rate reduction on loans for paying by automatic debit.

Based on the text, what is a reason for an individual to use automatic payments in financial planning?

A man has his paycheck directly deposited into his checking account. Hegets statements emailed to him for all of his bills. He uses his debit cardor his credit card to pay for rent, groceries, gas, and his daily visit to the local coffee shop. Every two weeks, he pays his outstanding bills and balances his checking account. He has a spreadsheet where he keeps a list of all of his monthly expenses and due dates. When paying his bills, he is careful to examine his statements to verify the charges. He checks his spreadsheet to make sure that he has not missed paying any of his bills. Once a year, he checks his credit score, which is very good.

Based on the text, what is the relationship between the man’s management of his checking account and his financial well-being?

Your “savings” are usually put into the safest places, or products, . . . savings accounts, checking accounts, and certificates of deposit. Some deposits in these products may be insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration. But there’s a tradeoff for security. . . . Your money is paid a low wage as it works for you.

Based on the text, what is the relationship between checking or savings products, and the growth of the money within those products?

Banks offer both checking and savings accounts. Checking accounts allow customers to withdraw money from their account frequently, but provide very low or no-interest rates. Savings accounts provide higher interest rates, but usually limit the number of withdrawals.

Based on the text, for which transaction is a savings account best suited?

Make sure all the checks, debits, automatic payments, and other withdrawals are ones you authorized. If you see a transaction you did not authorize, notify your bank immediately. . . .

If you don’t have enough money in your account, don't write the check or authorize the debit. Checks are being processed more quickly these days, which means the money may be debited from your account sooner. Also, many stores and utility, insurance, and credit card companies will convert your check to an electronic payment, which also means the money will be debited from your account sooner. If you don’t have enough money in your account when you write a check or authorize a debit, you could find yourself paying a fee.

Based on the text, which consequence can account holders avoid through proper management of their checking accounts?

Saving is a key principle. People who make a habit of saving regularly, even saving small amounts, are well on their way to success. It’s important to open a bank or credit union account so it will be simple and easy for you to save regularly. Then, use your savings to plan for life events and to be ready for unplanned or emergency needs.

Actions You Can Take

- Start saving, form a savings habit, and pay yourself first!

- Open and keep an account at a bank or credit union that meets your needs.

- Track your savings and investments, and monitor what you own

- Plan for short-term and long-term goals

- Build up emergency savings for unexpected events

- Consult with a qualified professional on investments and other key financial matters

- Save for retirement, children‛s education, and other major items

Based on the text, what role does a savings account play in an individual’s financial security?

An easy way to save is to pay yourself first. That means each pay period, before you are tempted to spend money, commit to putting some in a savings account. . . . People who keep track of their savings often end up saving more, because they have it on their minds.

Based on the text, what is an advantage of putting money from a paycheck directly into a savings account?

An overdraft occurs when you spend or withdraw more money than you have in your account and the bank or credit union pays to cover the shortfall. Overdrafts can be very expensive. Fees are generally charged “per item” and often as high as $35 or more per each overdraft transaction. . . . To reduce the likelihood that you will overdraft, you can:

- Switch to a checking account that is designed not to allow overdraft. Such “no-overdraft” products can help you manage your spending, but can still charge you a fee . . .

Based on the text, why does choosing a “no-overdraft” checking account contribute to an individual’s financial well-being?

Use the table below to answer the question.

What is the MAIN reason there is such a difference in these interest rates?

Use the information to answer the question.

Interest rates represent the amount a borrower must pay for the use of money from a lender. Short-term interest rates are frequently associated with loans of less than one year in duration; long-term interest rates are frequently used with loans of ten years or more.

Which type of borrower would MOST likely be interested in long-term interest rates?

Contact your creditors immediately if you’re having trouble making ends meet. Tell them why it’s difficult for you, and try to work out a modified payment plan that reduces your payments to a more manageable level. Don’t wait until your accounts have been turned over to a debt collector. At that point, your creditors have given up on you.

Based on the text, why should people contact their creditors if they are having trouble managing their debts?

Use the advertisement below to answer the question.

Special Offer—Get a debit card today!

• Free with your checking account

• No hidden fees

• Use at hundreds of locations

What is one disadvantage of the type of service offered in this advertisement?

The National Do Not Call Registry imposes restrictions on telemarketing calls. Telemarketers should not call a consumer’s number after it has been on the registry for 31 days. If a consumer is contacted, a complaint can be filed online with the telemarketer’s information. Consumers are able to register a home or mobile phone without any cost. This registration will be effective until they decide to change their information.

Which statement summarizes the National Do Not Call Registry?

It is critical for consumers to protect themselves from fraudulent business investment schemes. The internet offers thousands of opportunities for investment, but many of them are not financially sound. Wise consumers should research investment opportunities and avoid those that appear to be too good to be true.

How can consumers protect themselves from becoming caught in a fraudulent investment scheme?

A young man, age 23, lives in the city. He is single and rents an apartment. He lives 10 miles from his job at a car wash and drives his car to work each day. He is in good health but has a family history of diabetes. He occasionally travels to see parents who live in another state.

Which insurance policies would be most beneficial for this young man?

A man, age 38, lives in North Carolina. He is married with two children and owns his home. He lives one mile from his job at a bank and bicycles to work each day. He is in good health and has regular health checkups from his family doctor. He enjoys working on home-improvement projects. He is afraid of flying and does not like to take many vacations.

Which combination of insurance would be most appropriate for the man?