Lesson 10

1. c  Twice per month
2. d  9
3. a …calculated by multiplying…
4. federal tax
5. d …represent insurance…
6. b …pre-tax
7. c $315.21
8. her federal tax
9. a …more deductions than take home pay
10. b $284.79
11. deductions, hourly rate, hours worked, pay period, net and gross pay, last 4 digits of SSN

Lesson 11

1. Answers will vary for the top part.
2. Research the tax cycle:
   • January 1st, when you start a new job, Dec. 31, Jan. 23 (used to be the 1st), April 15th taxes are due — April 18th last day, October 15
3. Compare tax forms:
   • W-2, 1099, 1040, W-4, I-9
4. Worksheet answers:
   1. Married filing jointly
   2. Maxwell and his spouse both work, or Maxwell himself
      has two jobs
   3. The amount of taxes he’s paid in the last five years
   4. 2
   5. 0
   6. Step 3
   7. Submit a new W-4, claiming $500 more in Box 3
   8. $50
   9. Maxwell completed this W-4 for his job at Big City Office
      Furniture
   10. Big City Office Furniture
   11. ● For individual lines of the W-4 or accompanying worksheets, there are
       different directions based on your filing status, how many jobs you have,
       how much you anticipate earning, etc. If you don’t read carefully, you may
       enter the wrong values on individual lines of the form, which in turn can
       impact the final results.
       ● Based on your tax situation, you may need to complete additional
       worksheets to fill out the W-4 form correctly.
       ● Employers ultimately use the form to determine how much money to
       withhold from each paycheck, so completing the form incorrectly can
       lead to your vastly underpaying or overpaying your taxes throughout the
       year.

Lesson 12

2. Greg and Erin are legally required to file a tax return

3. While you have up to 3 years to file a tax return if you are owed a refund, you may want to file it on time, because — You are delaying getting your own money back –You may forget to file if you wait too long and you’ll never get the money back

4. They would want to claim exemption if they don’t expect to earn more than the minimum income threshold to file a tax return. This way they won’t have to file a return and wait to get a refund for any income taxes that were withheld.

5. 15.3%; It is the equivalent of the FICA taxes taken out of a regular employee’s paycheck

6. NO: Tim, Mason, Kathryn, Yanely, Tori;  YES: Jessica, Ren

Lesson 13

Ways to file your taxes.

1. Paper Filing:
   • Pro: You are in control and doesn’t cost anything

   • Con: It’s possible that you could make mistakes

2. Tax preparation websites:

   • Pro: Easy to use and convenient

   • Con: Costs money and, like paper filing, it’s possible that you could miss something or make mistakes

3. Hiring a tax professional:

   • Pro: Peace of mind knowing that a professional is handling what could be a complicated task

   • Con: Most likely will cost the most money out of all the options

What’s A W-2 Form?

1. 1. b) Lily worked at Scoops Ice Cream in 2024
   2. b) 987654321
   3. d) Income earned from her investments
   4. c) $17,780
   5. b) Federal income tax
   6. b) works in Indiana
   7. b) $1282.20
   8. c) $1102.36, 6.2%
   9. c) $2482.09
   10. b) 3.05%
   11. The W-2 form reports the employee’s gross income as well as federal, state, and
       additional taxes/deductions that were withheld from the employee’s pay during
       that year. The W-2 form is given to an employee in the month of January and is
       used to file annual income taxes on a 1040 form.

Lesson 20

1. Big Banks vs. Credit Unions
   • #1 Community banks typically have LOWER fees and charges when compared to a national bank AND Community banks typically give back and support the local community
   • #2 true
   • #3 all of them
2. Reasons to open a checking account
   • Some examples: Keeping your money safe, more options for paying bills, makes a paper trail to track money, can get cash from an ATM

   • Your money is protected.  If a bank fails, the FDIC or NCUA will reimburse you for deposits up to $250,000.

3. How to read a bank statement
   • Your bank statement includes a list of every transaction and it’s important to review this list for any mistakes.  Your bank will also include any changes to the terms of your account on a bank statement.
4. Worksheet Answers:
   1. Monthly
   2. $0.55
   3. Interac is an out-of-network ATM and First Bank charges
      customers if they use out-of-network ATMs.
   4. $694.81, 2 weeks
   5. John’s Savings account balance declined by $50 and his
      Checking account balance increased by $50
   6. This check was written by John and paid to another person or
      business.
   7. Check No. 410 for $710.49
   8. John’s payment was greater than the balance he had available
      in his account so he was charged a $35 fee.
   9. ATM Fee, Overdraft Fee, Maintenance Fee
   10. Ending Balance = Previous Balance + Deposits – Withdrawals
   11. ● Keep on top of bank balance to avoid overdrafting
       ● Use the itemized charges to create a budget with specific categories
       ● Spot and correct errors
       ● Make sure you are being paid on time and in full by your employer
       ● Keep track of fees to avoid in future. Fees include:
       ○ Overdraft
       ○ Monthly maintenance
       ○ ATM

Lesson 21

1. Savings Rate
   • December 2018 at 9.5%
   • April 2020 at 33.8%
   • The savings rate consistently hovered around 7% with very slight variations month to month.
   • [Answers will vary] People may have gotten a bonus or overtime pay from work near the end of the year and were able to save more money. People may have set a New Year’s Resolution to save more money.  
   • [Answers may vary] COVID-19: People may have saved more because of the economic uncertainty; People may have had more money to save because of loan deferrals and expanded unemployment benefits; Government stimulus payments; The overall personal savings rate may have jumped because government benefits benefitted people who are low-income or who live paycheck-to-paycheck and might not have been able to save otherwise.
2. What’s the difference?
   • Checking accounts are where you put your money if you want easy access to it while savings accounts are for storing money to earn interest
   • Checking accounts have relatively few restrictions on where and when you can deposit and withdraw your money
   • Checking accounts may have fees associated with them since the funds are not typically available for banks to lend out.  Savings accounts may not have these fees because banks can use the money in those accounts to lend to other customers.
3. Compound interest?

   • Compound interest is interest made from interest. Therefore, the earlier you start saving, the more time your money has to earn interest and for that interest to compound.

   • A lower interest rate means that compounding will have a reduced effect because compounding relies on earning new interest by compounding on previously earned interest.  It is also affected by inflation.

4. Opening a savings account
   • Multiple ways to access account information, Mobile access via smartphone that allows the user to make mobile deposits and link to other accounts for online transfers, Convenient access to a wide ATM network (to minimize or eliminate out-of-network ATM fees), FDIC-insured account; the federal government will guarantee up to $250,000 per account if for an unforeseen circumstance the bank cannot provide the account balance on demand to the saver, Few to no fees for savers with savings accounts – especially try to avoid minimum balance, maintenance or maximum withdrawal fees
   • Avoid accounts that have maintenance fees. Be on the lookout for fees related to too many withdrawals or minimum balance requirements.   
5. Worksheet Answers:
   1. Traditional Savings Account
      • The bank lends out the money you give it. They get interest from the loan they make and pay you a lesser amount of interest.
      • 0.06%
      • Minimum balance can be anywhere from none to thousands depending on the type of account and benefits offered.
      • Y
      • Y
      • N
      • N
   2. Online Savings Account
      • This is like a traditional bank but can offer higher rates because they don’t have all the expenses of buildings.
      • higher than others, at the time of writing this around 2.5%
      • Usually none
      • Y
      • Y
      • N
      • N
   3. Certificate of Deposit
      • This is like depositing money in an interest account, but you have to leave it in there for a set amount of time. In return, they agree to pay you a higher interest rate.
      • The interest will be depend on how long you keep it in, but it will be higher than a regular savings account.
      • minimum balance will vary
      • N
      • Y
      • N
      • Y
   4. Money Market Account
      • These are in between checking and bonds. There are limits on withdraws, higher minimums and higher interest rates than bank accounts.
      • ~ 2%
      • $500 to $10,000
      • Y
      • Y
      • Y but limited
      • N
   5. [Answers may vary] For this example solution:
      a. Ally Bank
      b. Ally.com
      c. Online
   6. Savings Account
      • Online Savings
      • 1.00%
      • None
      • None
      • None
   7.  CD
      • High Yield CD
      • 1.35%
      • $25,000
      • Early Withdrawal Fees
      • 18 months

• MMA
  • Money Market Account
  • 0.85%
  • None
  • None
  • None
• Apply Your knowledge
  • He should start a savings account.
  • High yield CD because she can earn the most interest. She can put part of it in High Yield CD and keep part of it in her savings account.
  • She might want to switch her money into a Money Market Account, because she would earn 0.1% more in interest than she currently is. She could also make occasional withdrawals from the MMA when it’s time to actually buy books.

Lesson 22

1. 7 Common Banking Fees and How to Avoid Them
   • Some banks offer accounts with no monthly fee.  Other banks will waive the fee if you have both a checking and savings account with the bank.  Finally, you can often avoid this type of fee by maintaining a required minimum balance.
   • $2.50 per transaction
   • A fee charged for making more than six withdrawals and transfers per month in a savings account, typically between $3 and $25 per transaction
   • Answers may vary
2. Overdraft Protection

   • A fee charged by a bank for making a purchase when you don’t have enough funds.  Instead of declining the transaction, banks charge you a fee to cover the cost of the transaction.

   • False. Overdraft protection is optional.
   • Many banks highlight the protection feature while not also highlighting the fees involved and consumers may not read the fine print about the fees.
3. Worksheet Answers:
   1. NSF Fee
   2. Overdraft Protection
   3. Overdraft Coverage
   4. Transaction Accepted
      1. Starts Day
      2. ✔
      3. ✔
      5. ✔
      6. ✔
   5. Transaction Declined
      1. Starts Day
      4. ✔
      7. ✔
      8. ✔
   6. Fee Charged
      1. Starts Day
      4. $35 NSF Fee
      7. $35 NSF Fee
   7. $70
   8. 116 – 4 – 43 – 35 – 10 – 3 – 35 = -$14
   9. Step 8: Joshua’s card will be declined when he tries to buy new soccer gear.
      The other two declined transactions will be as a result of checks and he will
      not know they were declined until he checks his statement or receives an alert
      from the bank.
   10. Transaction Accepted
       1. All of them
   11. Transaction Declined
       1. None of them
   12. Fee Charged
       1.  Starts Day
       4. ✔ – $35 Overdraft Fee
       5. ✔ – $35 Overdraft Fee
       6. ✔ – $35 Overdraft Fee
   13. $105
   14. 116 – 4 – 43 – 75 – 35 – 10 – 35 – 3 – 35 – 40 – 25 = -$189
   15. Transaction Accepted
       1. Starts Day
       2. ✔
       3. ✔
       4. ✔ – $50 transfer from
          savings account to
          cover this transaction
       5. ✔
       6. ✔
       7. ✔ – $50 transfer from
          savings account to
          cover this transaction
       8. ✔ – $50 transfer from
          savings account to
          cover this transaction
   16. Transaction Declined
       1. None
   17. Fee Charged
       1. Starts Day
       4. ✔ – $10 Transfer Fee
       7. ✔ – $10 Transfer Fee
       8. ✔ – $10 Transfer Fee
   18. $30
   19. 116 – 4 – 43 – 75 + 50 – 10 – 10 – 3 – 40 + 50 – 10 – 25 + 50 – 10 = $36 in checking
       account
   20. Overdraft protection would be best because it has the lowest total fees, all
       transactions were still approved and his account is positive at the end of the day. A
       tradeoff would be that his savings account has dropped significantly.

Lesson 23

1. What percent? 49%
2. The Costs of Being Unbanked
   • They didn’t have enough money to meet minimum balance requirements. Excessive fees, Lack of trust in banks
   • Lack of access to credit, Difficulty building an emergency fund, Time costs associated with paying bills
   • Many of these services, like checking cashing stores, have their fees clearly posted on the wall.  Traditional banks post their fees online in a difficult to find location.  Many who choose to be unbanked prefer to have a clear understanding of what they’re going to be charged for banking services without any surprises.

3. Prepaid cards are not associated with any bank or account and do not offer any line of credit.  They only allow you to digitize the money that you already have. SECOND QUESTION: Prepaid cards don’t have as many consumer protections as credit and debit cards associated with banks, Prepaid cards don’t help you build credit and improve your credit score, Prepaid cards can sometimes have fees for withdrawing cash, reloading the card, checking the balance, and making purchases

4. Payroll card
   • Employees get immediate access to their money, There is no need to use check cashing services and incur fees, Employees can set up automatic bill payments similar to traditional banks, Employees can shop online and anywhere that debit and credit cards are used
   • Monthly maintenance fees, Fees to replace a lost or stolen card, Balance inquiry fees, Withdrawal fees
5. Worksheet Answers:

1.  a. A household that is unbanked does not use any traditional banking
services provided through a bank or credit union

b. A household that is underbanked has a traditional savings or checking
account through a bank or credit union but also utilizes alternative
financial options such as check cashing, payday lenders, etc.

2. [Answers may vary]

3. a. Students will answer one of these and then answers will vary on
whether they’re surprised
1. WEST – 4.9% unbanked
2. MIDWEST – 5% unbanked
3. NORTHEAST – 4.7% unbanked
4. SOUTH – 6.2% unbanked

b. [Answers may vary]

5. Generally, there are greater numbers of unbanked households in southern
states than in northern

6. Generally, there are greater numbers of unbanked households in southern
states than in northern

7. Florida is an outlier, as is Hawai’i

8. Money Order, Check Cashing, or Bill Payment Services

9. Because unbanked households are using these services more frequently, they
will also be paying a much larger amount in fees

10. a. Southern states tend to have higher nonbank credit use

b. The trends correlate with each other – southern states have both more
unbanked households and higher nonbank credit use

Lesson 24

1. How much should I save?
   • 20%
   • Savings includes money in 401k/retirement account through employer, piggy bank/emergency funds, college savings account/529
   • The sooner a person starts, the longer the money invested or saved has to grow.  Every day that you wait is less opportunity for your money to compound.
2. Budgeting rule
   • false, post-tax
   • If you don’t make that much money or you live in a high cost of living area, your needs might exceed 50% of your total budget.

Lesson 37

1. Loan Basics
   • answers will vary
   • The principal, the interest rate, and the loan term
   • Lenders can take valuable collateral if you fail to repay your loan
   • Decrease your interest rate
   • Is almost always a better option
   • (Net Worth)
     • You would need to know assets (such as car, house, other major possessions, as well as cash, investment accounts, etc) and how much money they OWE (do they have a large mortgage or tons of credit card debt?)
     • You would need to know assets (such as car, house, other major possessions, as well as cash, investment accounts, etc) and how much money they OWE (do they have a large mortgage or tons of credit card debt?)
     • Take out a huge student loan that takes a decade or more to repay
     • Use borrowed money to fund a house or business that does NOT grow more valuable or, worse yet, loses value
     • Overspend on an auto loan or credit card bills she cannot afford to pay down quickly
   • Principal
   • Credit card
   • Use a loan to buy a brand new car
2. Comparing Cards
   • Overdraft fees, Spending limit is set by how much is in your checking account, Protected by federal law, Can be used at ATMs
   • Helps build credit score, Charges interest on balances, Can lead to excessive debt, Credit breaches, Protected by federal law, Rewards programs
   • Accessible – open to anyone, Many fees, Spending limit is set by how much money is preloaded onto the card, Great for travel, If lost or stolen, can’t be used to access financial accounts
3. Need to Know
   • Takes time to build up an emergency fund of savings, High student loan bills and other expenses might make it hard to pay out-of-pocket, Difficulty finding a job and/or low starting salaries in early career make budgeting tricky
   • Get a co-signer, Become an authorized user on another person’s credit card
   • Chip away at student loans, Get a secured credit card
4. Things to Consider
   • Annual fee, APR, and penalty fees/rates
   • Strongest answer – annual fee, because that’s an unnecessary expense when his cost of using credit would otherwise be zero, Also possible – grace period, because he’ll have flexibility in how long he can wait to pay his bill
   • It will give Delara more time each billing cycle to come up with the minimum monthly payment she owes
   • APR, because she’s going to carry a balance and the APR will determine how much interest she accrues each month
   • Penalty fees/rates, because she’s struggling financially and may, realistically, be late with her payments
   • Students *could* answer Annual Fee, but that seems less relevant to her situation, because that fee would be known and fixed, whereas interest and penalties could continue to spiral
5. Worksheet Answers:
   1. 0%
   2. A $10 cash advance fee will be charged AND an A.P.R. of
      25.24% will be applied on the $40 until it is paid back.
   3. She would have paid interest charges of $200.
   4. Qualify for an A.P.R. based on their creditworthiness
   5. A.P.R. triggered by a late payment
   6. His A.P.R. (interest rate) will rise to 30.24% and stay there
      until he makes six consecutive minimum payments.
   7. $206.00
   8. Paying your credit card bill in full and on time every
      month.
   9. Her A.P.R will change after six months and be between
      15.24% to 23.24% assuming that she has been making ontime payments during those first six months.
   10. Assume that Josie only uses her credit card to make
       purchases. She pays the balance on her credit card in full
       and on time every month. As a result, she pays no
       interest to the credit card company.
   11. [Answers may vary]
       ● APR: Knowing your credit card’s APR is very important because it tells you
       how much interest you’ll be charged if you keep a balance.
       ● Penalty Due Dates: It’s important to know the due dates to pay off your
       balance, and how long the grace period is, to avoid paying interest.
       ● Cost of Penalty Fees: Being aware of the cost of your penalty fees if you
       make a late payment, go over your credit limit, or if your payment returns,
       can encourage you to take only as much credit as you can pay back.

Lesson 38

1. Credit card debt explained
   • The credit card company extends you a line of credit. You purchase “stuff” and then have the choice to pay the balance in full or a minimum payment each month.
   • You avoid paying any interest and fees
   • The amount you still owe after you have made your most recent payment
   • The majority of your minimum payment is going toward interest and finance charges and only a small amount toward the principal
   • Pay your credit card bill in full and on time every single month, thus paying no interest or fees
2. Worksheet Answers:
   1. $0 — you don’t pay interest if you pay your bill in full every month
   2. a. $60 x 0.03 = $1.80 b. $28 (balance = $60, interest rate = 19.9%, payment = $1.80) c. $60 + $28 = $88
   3. a. $229 x 0.03 = $6.87 b. $107 (balance = $229, interest rate = 19.9%, payment = $6.87)  c. $229 + $107 = $336
   4. a. $27 (balance = $229, interest rate = 19.9%, payment = $20) b. $229 + $27 = $256
   5. All answers will vary in this chart, based on student selections. Part III 5. If you charge a purchase and don’t pay it in full before the bill is due, interest will
      always add to the real cost of the item. It makes the item more expensive in total.
   6. Answers include, but are not limited to:
      ● Pay their bill in full every month, so they avoid interest altogether.
      ● Make payments larger than the monthly minimum, to reduce # of months
      and interest they pay.
      ● Ask the credit card company to lower the interest rate.
      ● Do a balance transfer to a lower APR credit card (may incur fees for this).
      ● Pay large lump sums if funds become available.
      ● Don’t buy items they can’t afford in full, or save ahead specifically so money
      is available to pay off full balance.
3. Amoritiziation
   • The principal and the interest
   • $350
   • The payments stay the same, but the principal is paid down more quickly
   • You will pay your loan off faster, You will pay less total interest, You will pay less money overall
4. Not having debt is the best idea as far as I am concerned.

Lesson 39

1. I’m only giving answers for the last activity.
2. Worksheet Answers:
   1. $24,790 – $2500 down payment – $1500 cash allowance = $20,790
   2. $20,790 / 36 months = $578
   3. $0, because she’s taking the offer to pay the car in full in 36 months with no
      interest
   4. $24,790 – $1500 cash allowance = $23,290
   5. $24,790 – $2500 down payment – $500 cash allowance = $21,790
   6. $277 – using Bankrate calculator with $21,790 loan, 84 months, 1.9% interest
   7. $1498 – using Bankrate calculator
   8. $21790 loan + $2500 down payment + $1498 interest = $25,788
   9. $24790 – $2500 down payment – $400 cash allowance = $21,890
   10. $429 – using Bankrate calculator with $21890 loan, 60 months, 6.6% interest
   11. $3870 – using Bankrate calculator
   12. $21890 loan + $2500 down payment + $3870 interest = $28,260
   13. [Answers may vary]
       ● High interest rate = larger total interest and higher overall cost
       ● You don’t automatically qualify for the best rates, unless you have
       outstanding credit
       ● Companies advertise only the lowest rates available to lure you in,
       even though your own rates might be much higher
       ● It pays off to increase your payments (unless you’ve got a 0% APR), if
       possible, so that you pay less total interest
       ● A short loan term will decrease the total amount you pay, but will
       increase your monthly payment, which you might not be able to
       afford with your budget
   14. [Answers may vary]
       ● Buy a used car instead of brand new to save money
       ● Save up a larger down payment so a shorter loan term becomes more
       possible in her budget
       ● Work on building up her credit history, and wait until she can qualify
       for better terms, before buying the car
       ● Try financing through her bank or credit union; maybe they’ll offer
       better rates than the Volkswagen dealership
       ● Downgrade to model that offers a lower MSRP