Chapter 2 Flashcards
Income
Money you get from parents, grants, scholarships, student loans, and/or a job
Expense
Money going out, or spent. For example, groceries, bills, clothing.
Budget
A detailed financial plan used to allocate money for a specific time period
Gross income
The amount of money in a paycheck before paying taxes or other deductions
Net income
The amount of money you have after all taxes and deductions are taken out
Fixed expenses
Expenses that do not change by month such as a monthly mortgage or rent payment
Flexible expenses
Expenses that change monthly such as food and utilities
Debt
Money owed
Loan
A large debt that is repaid in smaller amounts over a period of time
Interest
The cost of borrowing money and is the money you pay a lender for a loan
Net worth
The amount of money that is yours after paying off debt
Assets
Items that you own that are worth money like a car, house, and furniture
Liability
An obligation to pay what you owe like a car loan
Credit report
A detailed credit history on an individual.
Fair Isaac Corporation (FICO) Score
A common credit rating that has a 300-850 score range. The higher the score, the lower the risk you are to the lender
