Choosing to Save Vocabulary Flashcards
The objective of this deck is to understand the basic terminology used when discussing savings and personal finance.
Assets
Everything an individual or household owns with monetary value
Compounding Interest
Earning interest on interest
Depository Institution
A business that offers banking and finance services
Goal
The end result of something a person intends to acquire, achieve, do, reach, or accomplish
Interest
The price of money
Interest Rate
The percentage rate paid on money invested or saved
Investing
The purchase of assets with the goal of increasing future income
Level of living
The amount of money needed to pay for the necessities and comforts currently enjoyed
Liquidity
How quickly and easily an asset can be converted into cash
Net Income
The amount of an individual’s take-home pay after taxes and other deductions have been taken out
Net Worth
Amount of money left when liabilities are subtracted from assets
Liabilities
Debts or what is owed to others
Net Worth Statement
Describes an individual or family’s financial condition on a specified date
Opportunity Cost
The value of the next best alternative that must be forgone
Pay Yourself First
A saving strategy that states to set aside a predetermined portion of money for saving each time a person is paid before using any of the money for spending
