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Strand 4
| Term | Definition |
|---|---|
| Budget | An approved plan to spend a certain amount of money in a given fiscal year or project period. |
| Envelope System | Relies on using cold, hard cash to manage your spending and savings. In this approach, you liquidate your monthly income, then physically divide it into individual envelopes that represent specific types of expenses. |
| Cost of Living | The amount of money needed to cover basic expenses such as housing, food, taxes, and healthcare in a certain place and time period. |
| Down Payment | Paid upfront in a financial transaction, such as purchasing a home or car. |
| Variable Expense | A cost that alters in conjunction with some type of activity. |
| Fixed Expense | A cost that's typically constant. |
| Gross Pay | Employees earn before taxes, benefits and other payroll deductions are withheld from their wages |
| Net Pay | The amount of money employees actually take home after all payroll deductions. |
| Pay Yourself First | A personal finance strategy that prioritizes saving and helps limit spending. |
| Salary | The compensation usually associated with executives, managers, professionals, office employees, etc. whose pay is stated on an annual or on a monthly basis. |
| Utilities | How much benefit investors obtain from portfolio performance. |
| Wage | The remuneration paid to an employee, usually on an hourly, daily, or piece rate basis. |
| Reconciliation | The accounting process by which two different data sets are compared to verify that the information within them is accurate. |
| Mortgage | An agreement between you and a lender that gives the lender the right to take your property if you fail to repay the money you've borrowed plus interest. |
| 401k | An employer-sponsored retirement savings plan that offers significant tax benefits while helping you plan for the future. |
| Amortization | Enables organizations to either pay off debt in equal installments over time |
| Charge Card | Similar to a credit card. But a big difference is that the total balance often has to be paid in full each month. |
| Collateral | An item of value that a lender can seize from a borrower if he or she fails to repay a loan according to the agreed terms. |
| Consolidation | The process of aggregating and consolidating trial balance data contained in the various general ledgers of subsidiaries to create financial reports. |
| Cosigner | Takes full responsibility for paying back a loan, along with the primary borrower. |
| Credit Limit | The maximum amount of money a lender will allow you to spend on a credit card or a line of credit. |
| Default | Occurs if the lender decides to close your account because you've missed payments. |
| Subsidized Loan | Loans for undergraduate students with financial need, as determined by your cost of attendance minus expected family contribution and other financial aid |
| Unsubsidized Loan | Loans for both undergraduate and graduate students that are not based on financial need. |
| Down Payment | Paid upfront in a financial transaction, such as purchasing a home or car. |
| Grace Period | A feature provided by banks or insurance companies so that customers can delay payment for a certain period of time after the due date (after the payment deadline). |
| Home Equity | The difference between how much your home is worth and how much you owe on your mortgage. |
| Interest Rate | The amount a lender charges a borrower and is a percentage of the principal—the amount loaned. |
| APR | The Annual Percentage - The cost you pay each year to borrow money, including fees, expressed as a percentage. |
| Lease | A financial product, in which a leasing company gives operating control of an asset to a business for an agreed period, |
| Payday Loan | A short-term, high cost loan, generally for $500 or less, that is typically due on your next payday. |
| Revolving Credit | Lets you borrow money up to a maximum credit limit, pay it back over time and borrow again as needed. |
| Schumer Box | A standardized summary of a credit card's key terms and conditions. |
| Term | The time period of an investment, the provisions of an agreement or contract, and lifespan assigned to an asset or liability. |
| Bankruptcy | A legal process overseen by federal bankruptcy courts. |
| Credit Bureau | Collect and store financial data about you that is submitted to them by creditors, such as lenders, credit card companies, and other financial companies. |
| Credit Score | A prediction of your credit behavior, such as how likely you are to pay a loan back on time, based on information from your credit reports. |
| Debt Snowball | Paying off the smallest of all your loans as quickly as possible. |
| FTC | Enforces laws that protect consumers from deceptive mortgage practices by certain kinds of lenders. |
| FICO Score | A three-digit number based on the information in your credit reports. |
| Foreclosure | A process that begins when a borrower fails to make their mortgage payments. |
| Identity Theft | When thieves use stolen credit to make fraudulent purchases. |
| Phishing | Fraudulent emails that trick the receivers into sharing their personal, financial or security information. |
| Spam | A spammer has the ability to accumulate major profits by thieving small chunks of money from numerous accounts. |
| 2-Factor Authentication | A way to verify that you are who you claim to be. |
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Baileyd0717
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