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77 Cards in this Set
- Front
- Back
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a plan for saving and spending your money
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Budget
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1. List Earnings & Calculate Income 2. Record for 1-2 months all spending
3. Categorize all expenditures 4. Calculate total monthly spending on spreadsheet |
4 Steps for a Good Budget
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Costs you must pay monthly like rent, car payments, mortgage payments on house, etc.
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Fixed Expenditures
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Wants that you don't have to spend money on
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Discretionary Spending
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An account agreement with a bank that allows one to deposit and withdraw money safely & is insured by FDIC
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Checking Account
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thrifty or not wasteful
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Frugal
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a booklet in which you'll record your account transactions
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Check Register
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Compareing the transactions in the bank statement to your own records to make sure they agree. Use worksheet on back to help you do this.
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Balancing Your Checkbook
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the lowest amount of funds that can be in your account before incurring a service charge.
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Minimum Balance
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a record of your checking account activity during the last month which lists deposits, withdrawls, ATM transactions, interest paid & fees charges
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Bank Statement
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a bank account used for savings that you may need to use within a short period of time; all deposits, withdrawls, fees, and interest will be recorded by your account
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Savings Account
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money earned through deposited funds or the price paid for borrowed money
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Interest
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allows you to save and write a limited number of checks; earns higher interest than savings account but requires more fees and higher minimum balance; has a variable interest rate ( + / - )
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Money Market Account
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offers a guaranteed interest rate for a fixed period of time; the longer the term, the higher the rate of interest earned; penalty fees apply to withdrawls before maturity
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time deposits
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a federal law that requires banks to provide you with certain information about thier accounts: APY, interest rates, fees & other charges, & features like minimum balance needed to avoid feeds
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Truth in Savings Act
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bank charges for services or privileges given to customers
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Fees
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an IOU issued by a corporation or government as a way for them to borrow money
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Bonds
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an investment that represents ownership in a corporation
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Stocks
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portions of a corporation's profits paid to stockholders
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Dividends
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the profit you make if you can sell your stock for more than you paid for it
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Capital Gain
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earns dividends dependent on market fluctuations
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Common Stock
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earns dividends fixed at an annual rate; 1st to be paid out
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Preferred Stock
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legal term for one who is adjudged insolvent; unable to pay one's debts
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Bankruptcy
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an investment in an investment company which sells stock & take money received for stock & invest it in stocks/bonds of other corporations
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Mutual Funds
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high-risk investments have potential for high returns while low-risk investment will yeild low returns
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"Risk vs. Payout"
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any organization that loans/invests money for its customers
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financial institutions
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provides checking, saving, and money market accounts and accept deposits for individuals & businesses
( Certificate of Deposit) |
Commercial Banks
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originally intended to promote savings and home financing but deregulation allowed expansion of their services
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Savings & Loan Associations
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accept deposits and specialize in low-risk investments like government bonds
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Savings Banks
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nonprofit banks owned by their members, usually employees of a single organization such as a company or trade union
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Credit Unions
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a steel box kept in a bank's vaults that can be rented to protect a customer's valuables
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Safe Deposit Box
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employ stock brokers who can buy or sell stock for its clients
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Brokerage Firms
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provided by insurance companies to allow a customer's savings to be tax-free for a period of time; may allow loans against one's insurance policy
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Tax-Deferred Savings
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loans, credit cards and other methods of deferred payment
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Credit
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people who lend you money at a cost of interest
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Creditor
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money owed a creditor
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debt
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Capacity, Capital, Character & Collateral
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"Four Cs of Credit"
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organization providing information on individual's borrowing & bill-paying habits
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Credit Bureau
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Fair Isaac Company provides information on individual's credit risk by a numerical score; >720 is good
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FICO Score
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property used to secure a loan
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collateral
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a card allowing an individual to defer payment for an interest fee; an unsecured loan
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charge card
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a card used to withdraw money from a bank account
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debit card
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interest accrued on, and fees charged for, some forms of credit
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finance charges
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money borrowed from banks which are either single-payment/signature or installment requiring collateral
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loans
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a number that tells you what your credit will cost; a finance charge expressed as an annual rate
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Annual Percentage Rate (APR)
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some interest rates will not change but other rates may rise or fall with the prime rate or other economic indicator changes
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Fixed vs. Variable Interest Rates
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require institutions issueing loans to tell you the exact finance charge of your loan; ex. Fair Credit Reporting Act & Billing Act
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Truth In Lending Laws
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the cost of enrolling in courses at a school
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Tuition
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"free money" given to applicants as students with "exceptional financial need" or minority groups
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Grant
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"free money" given to applicants as students who excell in academic or athletic skills or for specific fields; ROTC programs offer merit-based money to pay for tuition, fees, books & offer a monthly living allowance in return for military service after graduation
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Scholarship
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colleges offering programs that provide on-campus jobs for students receiveing financial aid; federally funded
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Work-Study Program
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have a low interest rate and a generous repayment schedule; may be subsidized by government & payment is deferred until graduation
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education loans
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Free Application for Federal Student Aid form used to calculate your Expected Family Contribution for tuition
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FAFSA Form
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Federal government's central location for aid information and on-line filing run by Dept. of Education
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Project EASI
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the loss in value of a car as soon as it is purchased and driven; 1/2 value after 3 yrs. then 3% loss per year
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Auto Depreciation
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the bank can take the collateral on a loan if the installment payments are not made; ex. the car or house purchased
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Repossession
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magazine that compares the quality and durability of commercial products for the consumer's benefit in selection
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Consumer Reports
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a contractual agreement between a landlord and renter of an apartment; lease
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Rental Agreement
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lodging acquired through a lease based on monthly payments including security deposit, and a one to two year committment
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Apartment Rental
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a rental agreement between a landlord and a tenant
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Lease
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a sum of money you pay the landlord to ensure that you will leave the apartment in the same condition you found it in
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security deposit
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a binding legal agreement to you and your landlord; both have rights & responsibilities under the law
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contract
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a bet between you and your insurance company based on formulas of probable risk; you pay the premiums hoping you will have no problem while they pay costs of an injury/illness /accident/ or damage to property
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insurance
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a sum of money paid to an insurance company usually monthly in return for the companies compensation for an accident/injury; varies by type of auto policy ie. liability, no-fault, collision or comprehensive
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premium
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an amount of expenses you must pay before the insurer will cover any expenses; ex. $500 deductible means you pay the 1st $500 and
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deductible
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the amount paid for damaged property; may cover replacement cost or only actual cash value at the time of accident
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coverage
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the percentage of each doctor visit/procedure that the patient must pay for services
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copayment
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a document summarizing your employment experience, education, and other information a potential employer wants to know
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Resume
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Resume, Cover Letter, Identifying Job Openings & Interviewing
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4 Tools for Employment
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allowed for a federal income tax to defer costs of WWII
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16th Amendment
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agency within the Treasury Dept. that interprets and applies federal income tax laws passed by Congress
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Internal Revenue Service
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federal, state & local taxes; Progressive Tax rises based on income, Proportional Taxes are in proportion to income, and Regressive Taxes decrease as income increases
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Types of Taxation
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must be completed to tell how much money to have withheld from your paycheck when starting a new job
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Form W-4
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a form will be sent you in January or February from any employers that withheld taxes on you; Save! for filing with your tax return
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W-2 Form
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more complicated tax forms allowing you to declare deductions from taxable income
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Tax Deductions (F 1040A / Standard 1040)
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a simple form for unmarried people with no children
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1040 EZ ( Short Form)
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Tax deadline for Federal Income Tax ( or you are penalized & may be audited)
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"April 15th" Annually
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