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PF Ch 1: Savings
Ch 1 Savings Terms
Term | Definition |
---|---|
Baby Steps | the seven steps to a healthy financial plan |
Compound Interest | interest paid on interest previously earned; credited daily, monthly, quarterly, semi-annually or annually on both principal and previously credited interest |
Emergency Fund | three to six months of expenses in readily available cash to be used only in the event of an emergency; Baby Step 3 |
Interest Rate | percentage paid to a lender for the use of borrowed money |
Money Market | mutual fund that seeks to maintain a stable share price and to earn current income by investing in interest-bearing instruments with short-term (usually 90 days or less) maturities |
Sinking Fund | saving money for a specific purpose to allow interest to work for you rather than against you. |