Personal Financial Literacy>Analyzing Financial Responsibility Versus Irresponsibility(TEKS.Math.8.12.F)
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Texas 8th Grade Math › Personal Financial Literacy>Analyzing Financial Responsibility Versus Irresponsibility(TEKS.Math.8.12.F)
Maya wants a new phone costing 900 dollars. She has 200 dollars saved and earns 12 dollars per hour working 12 hours per week. Which choice demonstrates financial responsibility?
Wait about 5 weeks to save the rest and pay cash, keeping a small cushion for a case and taxes.
Open a store credit card at 25% APR for a 10% discount now and make only minimum payments.
Use a 0% for 6 months plan but budget only 100 dollars per month, risking deferred interest on any remaining balance.
Borrow 700 dollars from a friend without a written plan or timeline to repay.
Explanation
Financial responsibility means choosing options that protect long‑term financial health. Saving for about 5 weeks lets Maya avoid interest and fees. The store card discount reduces the price to about 810 dollars, but carrying a balance at 25% APR can add well over 200 dollars in interest in a year if not paid off quickly. A 0% plan is only responsible if she can fully pay within the promo period; paying 100 dollars per month leaves a balance and triggers deferred interest from the purchase date, adding significant cost. An informal loan without a plan risks missed payments and damaged relationships. Paying cash avoids high‑interest debt and preserves future flexibility.
College choice: Two schools offer the same degree. In‑state tuition is 12,000 dollars per year; out‑of‑state is 35,000 dollars per year. You expect 5,000 dollars in scholarships and 3,000 dollars family help each year. Which choice is most financially responsible?
Choose the out‑of‑state school because the campus looks nicer; you can worry about loans after graduation.
Take private loans at a higher interest rate to go out‑of‑state now since borrowing is easy.
Choose the in‑state school, live at home the first year if possible, work limited hours, and borrow only what you must.
Put tuition on a credit card at a high APR to earn rewards points and pay it off later.
Explanation
Financial responsibility weighs total long‑term cost and debt. Net annual cost after aid is about 4,000 dollars in‑state and about 27,000 dollars out‑of‑state. Over four years that's roughly 16,000 dollars versus 108,000 dollars before interest. The larger debt can lead to very high monthly payments for many years, reducing future options like saving, moving, or starting a business. Choosing in‑state and minimizing borrowing lowers total cost, interest paid, and financial stress.
Jordan needs transportation to a part‑time job. He earns 12 dollars per hour for 20 hours per week (about 960 dollars per month before taxes) and has 9,000 dollars in savings. Which option is the most financially responsible?
Lease a new car for 399 dollars per month with 2,000 dollars due at signing; return it after three years.
Buy a reliable used car for 7,500 dollars in cash and budget 120 dollars per month for insurance, keeping some savings for emergencies.
Finance a 28,000 dollar new car for 6 years at a moderate APR, with payments around 475 dollars per month plus about 220 dollars per month for insurance.
Use rideshare to get to work at about 18 dollars per weekday indefinitely.
Explanation
Financial responsibility means choosing an option that fits income, avoids high debt, and preserves savings. Buying a reliable used car with cash avoids thousands in interest and keeps monthly costs around the insurance amount. The new‑car loan plus higher insurance could take most of his monthly income, crowding out savings and essentials. Leasing still requires ongoing high payments and provides no ownership. Rideshare costs add up each month without building any asset. Paying cash for a dependable used car keeps costs low and sustainable.
Luis wants a laptop that costs 900 dollars. He has 500 dollars saved. His hours at work vary each week. Which choice is most financially responsible?
Use a 0% for 4 months plan at 225 dollars per month even though his income is unstable, and hope to avoid late fees.
Put it on a credit card at 24% APR and make the minimum payment so cash flow is easier now.
Take a 400 dollar payday loan with a 60 dollar fee for two weeks and roll it over if needed.
Wait two months, increase hours where possible, save the remaining amount, and use a student discount to lower the price before paying cash.
Explanation
Financial responsibility favors avoiding high‑cost debt and matching payments to reliable income. Waiting a short time to save the balance prevents interest and fees. A 0% plan can be responsible only with certain on‑time payments; with variable hours, missed payments can trigger late fees and interest, raising the total cost. Credit card minimums keep balances high and can add hundreds in interest over time. Payday loans are very expensive and can trap borrowers in repeated fees. Paying cash after saving protects long‑term finances.
Ava earns about 80 dollars per week and is building an emergency fund to 300 dollars. She is considering three subscriptions costing 12, 8, and 10 dollars per month. Which plan shows financial responsibility?
Pick one low‑cost subscription for now and set an automatic transfer of 50 dollars per month to finish the emergency fund before adding more bills.
Add all three subscriptions immediately because 30 dollars per month seems small, and try to save whatever is left over.
Put the subscriptions on a credit card and pay interest if needed; it's only a few dollars per month.
Skip saving this year to focus on entertainment first since income is small.
Explanation
Financial responsibility prioritizes savings and limits recurring costs. Choosing one small subscription while automatically saving 50 dollars per month reaches the 300 dollar emergency goal in about four months, after which she can reassess. Adding all subscriptions now reduces savings capacity and delays the emergency fund, increasing the chance of using high‑interest debt for surprises. Paying for wants with a credit card adds interest and long‑term cost. Delaying savings sacrifices future stability for short‑term enjoyment.