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PF 1.00-2.00 Vocab
PF 1.00-2.00 Vocabulary Terms
| Term | Definition |
|---|---|
| Financial goals | Specific objectives that are accomplished through financial planning |
| Financial planning | Managing money continuously through life in order to reach your financial goals |
| Financial well‐being | Managing money in ways that build a sense of understanding, competence, and control |
| Well‐being | Feeling good about one’s life |
| Needs | Goods or services that are required for survival |
| Opportunity cost | The value of the next best alternative that must be forgone as a result of a decision |
| Trade‐off | Giving up one thing for another |
| Value | A fundamental belief or practice about what is desirable, worthwhile, and important to an individual |
| Want | The desire for goods and services that can increase our quality of life but are not absolutely necessary for our survival |
| Short‐term goals | A goal that will be attained in less than one year |
| Automated teller machine (ATM) | A machine that allows individuals to complete certain transactions from the machine without human assistance |
| Goal | Something a person intends to acquire, achieve, or accomplish in the future |
| Long‐term goals | A goal that will be attained in more than one year |
| Checking account | An account that allows quick access to funds for transactions |
| Commercial bank | For‐profit depository businesses that offer financial services to both consumers and other businesses |
| Contactless payment | Payment transactions that can be completed with no physical connection between the payment device and the physical point of sale (POS) terminal or store clerk |
| Credit Union | Depository institutions that offer many banking services and are owned by their customers |
| Debit card | A plastic card that is electronically connected to the cardholder’s depository institution account |
| Depository institution | Businesses that provide financial services |
| Interest | The price paid for using someone else’s money |
| Interest rate | The percentage rate used to calculate interest |
| Mobile banking | Apps that many depository institutions have developed that allow online banking access from devices such as smartphones, tablets and other mobile devices |
| Online banking | Allows customers to complete certain transactions from a secured Internet site by using a username and password from any place in the world with Internet access |
| Savings account | An account at a depository institution that is designed to hold money not spent on current consumption |
| Savings tool | Accounts offered by depository institutions whose main purpose is to help people manage their money |
| Community | A group of people with common interests and concern for the common good |
| Earned income | Money earned from working for pay |
| Excise tax | Taxes collected from the seller or retailer and as such often remain “hidden” in the price of a product or service, rather than being listed separately |
| Income tax | A tax on earned and unearned income |
| Payroll tax | A tax on earned income |
| Property tax | A tax on property, such as land, buildings (including homes), and automobiles |
| Sales tax | A tax on purchased goods and services |
| Taxes | A sum of money demanded by a government to support the government itself as well as specific facilities or services |
| Taxpayer | A person who pays a tax to national, state, county or municipal governments |
| Unearned income | Income received from sources other than employment |
| Asset | Items of monetary value a person or household owns |
| Expense | Money spent |
| Income | Money received |
| Investment asset | Financial assets purchased with the hope that they will generate income and appreciate in value to make it possible to sell at a higher price in the future |
| Liability | A debt or obligation owed to others |
| Market value | The amount you could realistically sell an asset for today |
| Monetary asset | Assets that can be quickly and easily converted into cash |
| Net worth | A measure of financial wealth and indicates the monetary value of all possessions that a person or household owns, minus the total amounts owed to others |
| Statement of Financial Position | A financial statement that describes an individual or family’s financial condition on a specified date by showing assets, liabilities, and net worth |
| Tangible asset | Personal property that was purchased to create a lifestyle or improve your life |
| Wealth | A measurement of how much a person or household owns once all debts have been paid |
| Gross income | An individual’s income earned as salary or wages before taxes and other deductions |
| Income and Expense Statement | Lists and summarizes income and expense transactions that have taken place over a specific period of time, usually a month or year |
| Insurance | A product that transfers risk from an individual to an insurance company or organization |
| Mortgage | A payment, usually monthly, applied to the balance of a home loan used when purchasing housing |
| Net gain | When income is greater than expenses |
| Net income | Take home pay |
| Net loss | When expenses are greater than income |
| Savings | The portion of current income not spent on consumption |
| Spending plan | An income and expense statement sometimes referred to as a budget which records both planned and actual income and expenses over a period of time |
Created by:
tomlinc
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