Financial Literacy Reflection

1.What are the costs and benefits of credit, such as loans and credit cards?
Credit enables people to buy things including homes and cars. Rather than waiting years and
saving to buy these things. Credit also allows people to make big purchases as large payments
and paying those payments off as time goes on. Credit can be very convenient but you have to be
able to pay the credit off or pay off whatever money from loans borrowed.

2.How can you use credit responsibly to achieve your financial goals?
Using credit responsibly can help you achieve financial goals, but using credit irresponsibly can
hurt you financially. It’s key to know your financial behaviors, and how they can affect your
credit. Examples for doing so are:
- Building your credit carefully, starting out a loan number and slowly increasing that
number.
- Paying your bills all the time and making sure you’re paying them on time. Overdue bills
will have a negative effect on credit scores.
- Staying informed about your credit, and knowing all the details.

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

There are seven ways Americans pay taxes.
They are:
- Income tax
- Sales tax
- Excise tax
- Payroll tax
- Property tax
- Estate tax
- Gift tax
Taxes are measured and calculated by income brackets. The less you make, the less your tax will
be; the more you make, the more your taxes will end up being.

4.How can insurance help protect your financial future?

Insurance is important because it protects you and your loved ones from major or minor costs
associated with disabilities, accidents, illness and even death. Being prepared for these things
with insurance will ensure you can still reach your personal financial goals.
5.How does setting goals and budgeting help you achieve financial success?
Goals change the outlook you have on money, prioritizing the way you spend it. Budgeting
comes along with setting deadlines to achieve these financial goals by making a clear plan and
staying consistent. This helps with saving, and large expenses.

6.How does maintaining healthy finances affect your overall physical and emotional health?
Maintaining healthy finances and making wise decisions affects your overall physical and
emotional health because stress affects overall mental health and well being. When you’re
financially healthy your physical problems are most likely going to improve.

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.
My plan to develop healthy financial practices is to set goals whatever they may be. Listing my
personal map showing where I am now and where I want to go and how I will achieve this by
making a plan. Getting into the habit of saving and taking a certain percentage of money and
putting it away for marriage, retirement, etc.