financial literacy cards Flashcards
Costs of applying for a credit card
- Grace period
- Annual Percentage Rate (APR)
- Annual fees
- Transaction fees
- Balancing computation method for the finance charge
Features of applying for a credit card
- Credit limit
- How widely the card is accepted
- What services and features are available
Credit card dos and don’t
- Shop around (look at various sources)
- Read and understand the contract (read the contract fully, don’t rush into signing anything, once a contract is signed get a copy, etc)
- Know your cost (Figure out the total cost while paying with credit, make the largest payments possible, etc.
Types of savings account
- Passbook account
- Statement account
- Interest-earing account
money market deposit accounts
- they are checking and saving accounts
- you can have immediate access to your money thru ATMs, a teller, or by writing up to three checks a month.
Certificate of deposit
-Bank pays a fixed amount of interest for a fixed amount of money in a fixed amount of time. There are no risks
Things you should look for when choosing a savings account.
- The interest rate (all money earned come from this factor)
- Fees, charges, and penalties (usually based on minimum balance requirements, or transaction fees.)
- Balance requirements
ways to invest in real estate
- buy a house, live in it, sell it for a profit
- buy income property
- buy land, hold it till its value goes up
advantages and disadvantages of real estate
-excellent protection against inflation( prices going up)
- can be difficult to turn into cash
- a specialized type of investment requiring study and knowledge of the business
retirement plans
- plans that help individuals set aside money to be used after they retire
advantages of using credit
- able to buy needed items now
- don’t need to carry cash
- creates a record of purchase
- more convenient than writing checks
- consolidates bills into one payment
disadvantages of using credit
- Interest (higher cost of items)
- may require additional fees
- financial difficulties may arise if one doesn’t keep track of one’s spending habits
- Increased impulse buying may occur
The five cs
- character- will YOU repay the debt
- capital- what if you don’t repay the debt
- capacity- can you repay the debt
- collateral- do you have assets that can be leveraged against the debt
- conditions- are the conditions that may affect your ability to repay
your responsibility of credit
- borrow only when you can repay
- read and understand the credit contract
- pay debts promptly (immediately)
- notify creditor if you cannot meet payments
- report lost or stolen credit cards
- never give your credit card to someone over the phone unless you initiated the call.
Salary
An amount of money paid to an employee by the employer.
federal tax
money used by the government to pay for the growth and upkeep of the country.
income tax
A type of tax the government imposes on income-generating businesses. Income taxes are a source of revenue for the government. They use it to fund public services, etc.
CPP
A Canadien pension plan is a monthly, taxable benefit that replaces part of your income when you retire.
EI
The employment insurance program provides temporary income support to unemployed workers while they look for employment or to upgrade their skills.
Pension
A pension is a fund into which a sum of money is added during an employee’s employment years and from which payments are drawn to support the person’s retirement.
YTD gross
Amount of money a person earned for the year before deductions
YTD net pay
Amount of money a person earned after deductions
YTD deductions
Amount of money deducted from a person ytd gross
union dues
Union dues are a regular payment of money made by members of unions.
long term disability
an insurance policy that protects an employee from loss of income in the event that he or she is unable to work due to illness, injury, or accident for a long period of time
net pay
The amount of money the employee takes home, not the amount of money it costs to employ them.
Fixed expenses
Any expenses (that the cost) that do not change from period to period. Like mortgage or rent payments.
Variable expenses
A variable cost is a corporate expense that changes in proportion to production output. Variable costs increase or decrease depending on a company’s production volume
saving bond
Savings bonds are a lower-risk way to save. When you buy a savings bond
you are loaning money to the government for a set period at a fixed interest rate.
Paystub
a piece of paper that is given to an employee with each paycheck and that shows the amount of money that the employee earned and the amount that was removed for taxes, insurance costs, etc.
Checking account
A bank account that allows easy access to your money. They usually offer low risk or no interest.
How much debt should you have compared to your income?
A ratio of 30% or less is a healthy relationship. Anything above 43% is a cause of concern.
Expenses
the cost required for something. The money spent on something
Deductions
an expense that can be subtracted from a person’s income in order to reduce the amount owed.
Mutual funds
Professionally managed portfolios made up of stocks, bonds, and other investments.
stocks
represent ownership of a corporation. Stockholders own a share of the company and are entitled to a share of the profit as well as a vote in how the profit is run.
