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40 Cards in this Set

  • Front
  • Back
WANTS
items, activities, or services that increase the quality of life
NEEDS
the essentials or basics of life
CASH FLOW
a measure of the money a person receives and spends
OPPORTUNITY COST
the value of what is given up when one person chooses one option over another
COST OF LIVING
the average cost of a variety of expenses for living, such as rent or home costs, insurances, utilities like natural gas and electricity and food
BUDGET
a plan for spending or saving money based on a person's goals during a given time period
GROSS INCOME
the total amount of income from wages or salary before payroll deductions
NET INCOME
the amount of a paycheck that a person can actually spend; essentially gross income less an payroll deductions
FEDERAL INCOME TAX
a fee for the support of federal government programs collected by the employer and paid to the Internal Revenue Service
W-4 FORM
a federal government form that effectively tells your employer how much to withhold from your paycheck for taxes
FIXED EXPENSES
expenses that are the exact amount everytime
VARIABLE EXPENSES
expenses that are not fixed
P.Y.F
Pay Yourself First; a bill you owe yourself, save a percentage of every paycheck you get
COST/BENEFIT ANALYSIS
weighing the cost of a product or service against the benefit it will provide; make a pros and cons list
CHECK
a slip or ticket showing the amount owed
OVERDRAFT PROTECTION
a financial service offered by banking institutions. It advances money to cover an attempt to withdraw money from an account that does not have sufficient funds. Prevents check from bouncing. Allows consumers to borrow money through a withdrawal.
SAVINGS
money set aside for short-term goals
INVESTMENTS
money set aside for future income, benefit, or profit to meet long-term goals
TIME VALUE OF MONEY
the relationship between time, money, a rate of return and earnings growth
EARNED INTEREST
the payment a person receives for allowing a financial institution or corporation to use his/her money
COMPOUND INTEREST
earning interest on interest
THE RULE OF 72
how long it takes for money to double in value
RISK TO RETURN
the more risk you take with your money the greater the potential return you receive, the reverse is also true
RATE OF RETURN
how fast money in a savings or an investment account grows
DIVERSIFICATION
spreading invested dollars among several different savings or investments to reduce risk
INFLATION
an increase in the price of goods and services
CERTIFICATE OF DEPOSIT
A certificate from a bank stating that the named party has a specified sum on deposit, usually for a given period of time at a fixed rate of interest.
MONEY MARKET ACCOUNTS
a financial market for short-term borrowing and lending
CAPITAL GAINS
the difference between the purchase price and the selling price of an investment
MUTUAL FUNDS
an investment that pools money from several investors and uses it to buy a particular type of investment, such as stocks
CREDIT
an amount of money someone is willing to loan another person based on trust and the expectation that the money will be repaid with interest
ANNUAL PERCENTAGE RATE
the total annual percentage amount it will cost a person to use credit
FINANCE CHARGE
the actual dollar cost of using credit, which is calculated by the lender
INSTALLMENT LOAN
a loan that requires you to make payments on a regular basis, usually monthly, until the loan is paid off
CREDIT REPORT
an historical account of how a person has used credit
CAPITAL
personal property you can use to pay off debts
BANKRUPTCY
a legal process that allows someone deeply in debt to create a plan to get out of debt
REDUCIBLE
an item that could lower the price of
INSURANCE
protection against large-scale financial loss
LIABILITY
pays for bodily injury to other people and damage to property