Andrea Ratcliff

Lesson 14
Financial Literacy Reflection
1. What are the costs and benefits of credit, such as loans and credit cards?
Credit cards can make it easier to buy things. If you don't like to carry large amounts of cash
with you or if a company doesn't accept cash purchases (for example most airlines, hotels, and
car rental agencies), putting purchases on a credit card can make buying things easier. The
biggest disadvantage of credit cards is that they encourage people to spend money that they
don't have. Most credit cards do not require you to pay off your balance each month, so even if
you only have $100, you may be able to spend up to $500 or $1,000 on your credit card. While
this may seem like 'free money' at the time, you will have to pay it off -- and the longer you
wait, the more money you will owe since credit card companies charge you interest each
month on the money you have borrowed.

2. How can you use credit responsibly to achieve your financial goals?
Learn my FICO Score, don’t close all of my accounts, do close accounts with high interest
rates or fees, use my credit cards periodically for small purchases, use reward cards, don’t
carry a balance, and request a higher credit limit.

3. What taxes do citizens pay and how are they calculated?

As a group, taxpayers who make over $1,000,000 pay an average tax rate of 27.4 percent. At
the bottom of the income scale, taxpayers who earn less than $10,000 pay an average tax rate
of -7.1 percent, which means they receive money back from the government, in the form of
refundable tax credits.

4. How can insurance help protect your financial future?

Health insurance protects individual and family personal finances by simplifying financial
planning. Offsetting expensive and unexpected emergency costs. Offering future savings
advantages through health savings accounts (HSAs).

5. How does setting goals and budgeting help you achieve financial success?
Financial planning involves identifying a goal and the general direction to take to pursue that
goal, while budgeting is an everyday tool that, used regularly, helps you reach the goals in your
financial plan. Suppose your goal is to set aside money for retirement.

6. How do maintaining healthy finances affect your overall physical and emotional health?
Researchers have also found a link between financial problems and depression and anxiety.
These conditions come with their own set of symptoms, including changes in appetite or
weight, exhaustion or fatigue, an increased heart rate, restlessness, and sweating.
7. What is your plan to develop healthy financial practices? Discuss three ways
that you plan to make healthy financial decisions to protect your future.
 Save for retirement
 Save for college
 Create Basic Estate Planning Documents