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Financial Literacy
| Term | Definition |
|---|---|
| budget | a plan for using money to meet wants and needs. |
| career | a commitment to work in a field that you find interesting and fulfilling |
| deductions | the various amounts that are subtracted from an employee's gross earnings |
| expense | the cost of goods and services including fixed and variable expenses |
| fixed expenses | expenses that remain the same (like rent, car insurance, car payment) |
| goal | things you want to accomplish |
| goal setting | putting down in writing what things you want to accomplish |
| income | cash inflow, or the money you receive |
| Medicare | a federally funded health insurance program available mainly to people over 65 and to people with certain disabilities |
| net income | the income you receive (take home pay) |
| variable expenses | expenses that change |
| benefits received | the belief that people should be taxed according to the benefits they receive from the good or service that the tax supports. Example is gasoline tax |
| ethics | a set of principles or beliefs that govern an individual's actions |
| morals | a system of values and principles of conduct that promotes good customs and virtues while condemning bad customs and vices |
| progressive tax | a tax that takes a larger percentage of income from people in higher income groups than from people in lower income ones. (Ex: federal income tax) |
| checking account | an account someone has with a bank or credit union into which they deposit money and which they can use checks with. |
| credit union | a nonprofit financial institution that is owned by its members and organized for their benefit |
| debit card | a plastic card that provides access to electronic funds transfer from an ATM or point of sale terminal |
| mortgage company | a company that gives a long term loan to someone who buys property |
| check | a written order directing a bank or credit union to pay a person or business a specific sum of money |
| opportunity cost | the value of the second best alternative that a person gives up when making one choice instead of another. |
| principal | the original amount of money deposited or invested |
| Rate of Return | how fast money in savings accounts or investments grows |
| Rule of 72 | the length in time in years it takes an amount of money saved to double when it receives compound interest. Interest Rate/72 |
| saving | the process of setting aside income for future spending |
| savings account | a financial institution deposit account that pays interest and allows withdrawals |
| simple interest | interest calculated periodically on the loan principal or investment principal only not on previously earned interest |
| 4O1K | a retirement plan that allows employees in private companies to make contributions of pretax dollars to a company pool that is then invested in stocks, bonds or money markets. |
| annuity | a contract between an individual and an insurance company where the individual makes a series of payments that are invested by the company and repaid to the individual at a later date generally during retirement. |
| fraud risk | the potential that someone either deceives or tricks you into investing in something where you get nothing in return. |
| Individual Retirement Account (I.R.A.) | an account in which an individual may set aside earned income in a tax deferred savings plan for his or her retirement. |
| Social Security | a federal system of old age, survivors, disability and hospital care (medicare) insurance which requires employers to withhold or transfer wages from employees paychecks and deposit that money in designated accounts. |
| closing costs | costs paid when buying a house or real estate |
| landlord | a person who owns property and rents it to another. |
| lease | a written contract specifying the terms for the use of an asset and the legal responsibilities of both parties to the agreement, such as a property owner and a tenant. |
| mortgage | a loan to finance the purchase of real estate, usually with specified payment periods and interest rates. |
| tenant | a person who pays rent; the legal name for a renter. |
| credit | an agreement to provide goods, services, or money in exchange for future payments with interest by a specific date or according to a specific schedule. |
| credit bureau | an establishment that collects and distributes credit history information of individuals and businesses |
| credit score/rating | a measure of creditworthiness based on an analysis of the consumer's financial history often computed as a numerical score using the FICO or other scoring system |
| interest | a payment for using someone else's money and is stated as a percentage. |
| interest rate | the percentage rate of interest charged to the borrower or paid to a lender, saver or investor. |
| coinsurance | the percentage of your medical costs that you will need to pay after meeting your deductible. |
| copayment | the amount you have to pay each time you visit a health care provider. |
| deductible | the dollar amount or percentage of a loss that is not insured, as specified in an insurance policy. |
| good student discount | discounts given to students and/or their parents on their automobile insurance premiums for having good grades. |
| premium | the fee that is paid for insurance protection |
| risk | a measure of the uncertainty of an investment's rate of return; possible losses involving income or standard of living; the possibility of loss from harm to people or property covered by insurance. |
| gambling | taking risks with personal finances or personal assets |
| probability | the chance or likelihood that something will happen. |
| bankruptcy | a state of being legally released from the obligation to repay some or all debt in exchange for the forced loss of certain assets. |
| Consumer Credit Counseling | services offered by organizations that help consumers find a way to repay debts through careful budgeting and management of funds. |
| creditor | a person or company to whom money is owed. |
| charitable giving | the act of giving to charitable organizations or to those in need. |
| tax deduction | an expense that a taxpayer can subtract from taxable income. Ex: deductions for mortgage interest and deductions for gifts to charity. |
| balance | the amount of charges or lack thereof, owed to a credit card company. |
| credit card | a plastic card that authorizes the delivery of goods and services in exchange for future payment with interest, according to a specific schedule. |
| grace period | the period of time after which a payment becomes due on a credit card. |
| dumpster diving | when people go through your trash looking for bills or other paper with your personal financial information on it. |
| fraud | someone who knowingly deceives you for their own personal gain. |
| hacking | when people hack into your computer or another computer system, including schools, credit card companies, and other places maintaining personal information |
| identity theft | using a person's name or personal information without the person's permission to steal money or get other benefit |
| phishing | people who pretend to be banks,the IRS, or some other organization and send you an email, letter or phone call asking for your personal information |
Created by:
weakstick
Popular Economics sets