Personal Finance Word Scramble
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Term | Definition |
Taxes | Required charges of citizens by local, state, and federal governments; roads, police, schools, government, fire and emergency services |
W-4 Form | Filled out before job; Employee's withholding allowance certificate; determines the amount of money withheld for taxes |
I-9 Form | Used to prove the identity of people and avoid hiring non U.S. citizens; passport, driver's licence, U.S. military card, Social Security card, birth certificate |
W-2 Form | States the amount of money earned and taxes paid througout the previous year |
Paycheck | Paper check with stub; least secure |
Direct Deposit | Employers directly deposit employee's paycheck into the authorized employee's bank account |
Payroll Card | Electronically carries the balance of the employee's net income |
Paycheck Pros | Employee controls when the check is deposited |
Paycheck Cons | Least secure; employee is responsible for getting it to the bank; easy to lose |
Direct Deposit Pros | No direct handling of check; employee knows exactly when he/she will be paid |
Direct Deposit Cons | There could be a computer issue |
Payroll Card Pros | Money goes to the card automatically |
Payroll Card Cons | May charge fees for the card |
Personal Information | The employee's full name, address, and social security number or employee identification number |
Pay Period | The length of time for which an employee's wages are calculated; weekly, bi-weekly, or monthly |
Gross Income | Multiply hours by pay rate; Total amount of money earned before payroll withholdings |
Payroll Withholdings | Amount of money subtracted from the gross income for taxes |
Withholding Tax | Amount required by law for employers to withhold from earned wages to pay taxes |
FICA | Federal Insurance Contribution Act; Medicare and Social Security |
Social Security | Provides retirement income for the elderly and pays disability benifits |
Medicare | Health care program for the elderly and disabled |
Net Income | Amount left after all payroll deductions have been taken from the gross income; Gross income minus taxes |
Year-to-Date | Totals all of the deductions which have been withheld from an individual's paycheck from January 1st to the last day of the pay period indicated on the paycheck stub |
Job | A specific task done as a part of the routine of one's occupation |
Occupation | A wide category of jobs with similar characteristics |
Career | A lifetime journey of building and making good use of your skills, knowledge, and experiences |
Human Capital | Process of self-investment |
Transferable Skills | Skills acquired through the process of self-investment |
Standard of Living | Minimum necessities, comforts, or luxuries thought to be essential |
Well-being | State of being happy, healthy, and prosperous |
Factors that influence a career | Jobs, occupations, human capital, transferable skills, education, family/friends, and leisure activites |
Goal | Something a person intends to accomplish |
Why Set Goals? | Like a road map; provides direction, focus on important things, and keep the end result in mind |
Short-Term Goals | Can be accomplished within one year |
Long-Term Goals | Can be accomplished in more than one year |
SMART Goals | Well written goals that are Specific, Measurable, Attainable, Realistic, and Time bound |
Educational Goals | Help individuals prepare for success in the workplace; short and long term; provide guidance and direction; enable individuals to reach financial goals |
Financial Goals | A goal that guides financial planning; short and long term |
Specific | State exactly what is to be done |
Measurable | Include how the goal can be measured |
Attainable | Determine steps to reach the goal |
Realistic | Don't set goals for something unrealistic |
Time Bound | State when the goal will be met |
Decision | A choice that is made about things that affect a person's life |
Routine Decisions | Made on a day-to-day basis; don't require a lot of time to think through; can become a habit |
Major Decisions | Have long-term effects on your life; should be made very carefully and with a lot of thought |
Financial Decisions | Major decision; impact an individual's or family's well-being |
Decision Making Process | Guides individuals to think through all components of making a good decision |
Identify the Problem | 1st step in decision making process; Know problem or question before searching for an answer |
List Alternatives | 2nd step in decision making process; Brainstorm pros and cons for all of the possible choices |
Decide | 3rd step in decision making process; Make the best choice after thinking about all of the consequences |
Evaluate the Results | 4th and final step in decision making process; Will help in making the better decision in the future |
Values | Something that is desirable, worthwhile, and important; influenced by family, friends, teachers, coaches, tv, and movies |
Need | Something necessary or required for life |
Wants | Something unnecessary but desired |
Bartering | Direct exchange of one good for another |
Lydians | group of people that were the first in the Western World to make coins |
Commodity Money | Coins containing precious metals; traded because of its value |
Mulberry Bark Tree | Used by Chinese to make their paper money |
Representative Money | Tokens or pieces of paper that aren't intrinsically valuable; can be exchanged for commodity |
Fiat Money | Can't be redeemed for a commodity |
Federal Reserve | Responsible for maintaining the integrity of U.S. currency |
Chinese | First nationality to use paper money |
Spanish 8-reale | One of the most widely used coins during the 18th century; split into pieces |
Needs Examples | Water, food, shelter, and clothing |
Wants Examples | iPod, laptop, iPhone, car, tv |
Spending Plan | Financial statement individuals can use to assist with money management |
Income | Money going in |
Expenses | Money going out |
Spending Plan Benifits | Gives understanding of where money is going, tracks income and expenses, helps people meet financial goals, and helps people live within their income |
Major Expenditures | largest expenses in a spending plan; housing,transportation, insurance, food, other, & savings |
Pay What First? | Yourself |
Insurance | protects people financially from unexpected expenses caused by accidents or illness |
Types of Insurance | Health, Automobile,& Home |
Housing Expenses | Insurance, taxes, maintenance, utilities, move-in costs, & monthly payment |
Car Expenses | Monthly payment, maintenance, fuel, licence and registration, insurance, & optional upgrades |
Food Expenses (Least Expensive to Most Expensive) | Meals from scratch at home, convenience foods at home, fast food, sit-down restaurant |
Savings | Income not spent on current expenses |
Pay Yourself First | Set aside money for saving before spending any money |
Savings % | 10% |
Insurance % | 7% |
Housing % | 30% |
Transportation % | 20% |
Food % | 15% |
Other % | 18% |
Other Examples | Clothing, Donations, Personal Care, & Entertainment |
Impulse Buying | Unplanned buying, little consideration of product |
Comparison Shopping | Planned buying, careful consideration of product |
Benefits of Comparison Shopping | buy same product for less money, buy more goods with the same amount of money, buy a better quality product for the same amount of money |
Steps of Comparison Shopping in Order | 1) Decide exactly what is needed before shopping, 2) What is the quality of the product I am using? 3) What is the total cost? 4) How will the product be used? 5) Consider the opportunity cost and make a decision |
Opportunity Cost | Something an individual gives up to receive another |
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