personal finance Flashcards
Biggest part of your budget.
Housing
Qualities of a good budget.
practical/flexible/geared toward goals
The minimum amount you should save.
10%
Non-profit bank owned by its customers who are the shareholders.
Credit Union
What debit card feature should you look for if you are going to use the ATM a lot?
Free ATM fees
Use this when online shopping.
Credit card
Only thing that cannot be done by online banking.
Cash a check
Non-sufficient funds, also called overdraft.
NSF
Use this endorsement when depositing a check at a later date.
restrictive endorsement
Do this to your blank checks that you are not going to use anymore.
shred
Write this on a check when you don’t want to use it anymore. Also, make sure to record it in your check register.
void
S.M.A.R.T. Goal - How often you will save
S.M.A.R.T. Goal - Attainable
S.M.A.R.T. Goal - How much will you save
S.M.A.R.T. Goal - Measurable
S.M.A.R.T. Goal - What are you saving for
S.M.A.R.T. Goal - Specific
S.M.A.R.T. Goal - What is the opportunity cost or what are you giving up to save
S.M.A.R.T. Goal - Relevant
S.M.A.R.T. Goal - What is the end date of your goal
S.M.A.R.T. Goal - Timely
An example would be rent or mortgage payment.
fixed expense
An example would be your ComEd bill.
variable expense
Not having enough money to cover expenses.
budget deficit
The money left over after paying bills and putting money into your savings account.
Discretionary Income
Another way to say net income.
Take home pay
Gross income minus your withholdings.
Net income
Review all expenses and cut back.
Reconciliation
How to fix a budget
Comparing your bank statement to your check register.
Net deposit
Another name for your total deposit.
Liquidity
How quickly and easily an asset can be converted into cash.
Compound Interest
Earning interest on interest.
The idea of putting money into your savings before spending anything.
Pay Yourself First
Savings tools are secure because they are protected by this U.S. government agency against loss.
FDIC
Savings Account
This savings tool should be used if you need money for an emergency.
When buying a stock, there is a potential to do this.
Lose money
The idea that riskier investments can have a higher potential reward.
Risk vs returns
File away your check until it is officially deposited then shred it.
Electronic deposit procedure
A check that is on your register but not your monthly statement.
A check that is on your register but not your monthly statement.
The idea to save for as long as possible at the highest rate possible.
Time value of money
This type of stock pays dividends.
Income Stock
Examples are baseball cards, beanie babies, and American dolls.
Collectibles
You should apply for this if you are denied a credit card or have no credit history
Secured Credit Card
You should apply for this if you are denied a credit card or have no credit history
Secured Credit Card
Close the account by phone, in writing, and then destroy the card.
Cancel a credit card procedures
An option if a 401k is not offered. You may contribute $6000 a year tax deferred.
I.R.A
You can view these once a year for free from each of the three main credit reporting agencies.
credit reports
This is the amount that S&P 500 goes up on average per year.
10%
Not including mortgage, under 20% of your net income.
safe credit limit
Pay your credit card statement balance in full every month to avoid this.
interest
Having this will cause you to pay a higher interest rate on a loan.
low credit score
This index measures the top 30 blue chip stocks.
Dow Jones
Paying this means you are going to end up paying a lot more for whatever you bought because of interest charges.
minimum payments
Wrongfully acquiring and using someone’s personal identification.
Identity theft
Cost more than leasing.
purchasing
A company has one of these when they want to go public and raise money.
IPO
This type of loan is used when you buy a car and make equal payments. It is another name for closed-end credit.
Installment Credit
Evaluate these when purchasing a car.
opportunity costs and trade offs
Diversified investment consisting of a variety of stocks and bonds.
mutual funds
This type of planning helps you create tax shelters, establishing a trust and writing a will.
Estate Planning
The reason your car goes down in value and is not considered in the cost of owning a car.
depreciation
A tool used to find the value of a car.
Kelley blue book
This is a debt a company issues for a period of time.
bonds
People consider cost, proximity to work, and mass transit when looking for one of these.
Apartment
Same as renting.
leasing
This type of credit requires equal payments until it is paid off.
Closed-End Credit
When you owe more than the value of the car.
upside down
The costs of using credit, including interest, and late charges.
finance charges
This type of investment can generate rental income, should appreciate in value, and has less risk.
real estate
A total credit amount is extended in advance so the borrower does not have to apply for credit each time they borrow money.
open end credit
Spreading your investments between stocks, bonds, and different industries.
Diversify
Character, Capacity, and Capital are a measure of this.
credit worthiness
The account has the money collected before tax, helps you save for retirement, and your company may contribute.
401k
Group of companies with similar products.
Industry
Used to pay for damage done to an apartment.
Security Deposit
Value of home minus what you owe.
Equity
Examples include a title search, the fee for obtaining a credit report, and title insurance. These do not include repairs needed to be done.
closing cost
Type of car insurance that is required.
Liability - Car
This is collected by your city. They do not stay the same every year.
property taxes
Pays for damages to your car in a hit and run.
liability car
Pays for damages to your car in a hit and run.
uninsured/underinsured
Cost of using someone’s property.
renting
The tax form sent by your employer at the end of January summarizing your wages and taxes withheld.
W-2
Pays for your car damages if you cause the accident.
collisions
Good schools, easy to sell, and appreciate in value.
Picking a home location
The amount paid by the policyholder for the initial portion of a loss before the insurance coverage begins.
deductible
The tax form summarizing the interest earned.
1099-INT
The 3rd party holds money to pay property taxes in this account type.
Escrow account
You complete this when you are hired in order to have your taxes calculated correctly on her paycheck.
W-4
Federal form is used to reconcile your federal income taxes.
1040
A contract between the individual and the insurer specifying the terms of the insurance arrangement.
Policy
Is named to receive the benefits from an insurance policy.
Beneficiary
When the bank takes house for not making 4 consecutive mortgage payments.
foreclosure
An unpredictable event which leads to loss or damage.
risk
The amount a policyholder pays for the policy.
premium
Insurance that pays for your belongings inside your house when damaged.
personal property
This protects the lender, not the person borrowing.
P.M.I
Pays for damage to your car caused by natural disasters.
comprehensive
Coverage that can be added to a policy, such as towing or rental reimbursement.
rider
Prevents discrimination when buying a house.
fair housing act
An arrangement between an individual and an insurer to protect the individual against risk.
insurance
Pays for medical bills if someone is hurt on your property or dog bites somebody.
Liability - Home
Pays for damages to your house.
structural
Pays for the damage to the other car if you caused the accident.
Property damage
Insuring a portion of your income due to illness or injury that happened outside the workplace.
disability
Covers fire in your unit, damage to other units you cause, or your pet attacks somebody in your apartment.
renters insurance
An HMO is cheaper but more restrictive, while a PPO is more expensive but offers more flexibility.
PPO VS HMO
Pays for the medical bills of the other people if you cause the accident.
bodily injury
Term life insurance only pays if the policyholder dies during the term of the policy, while whole life insurance pays a death benefit whenever the policyholder dies.
term vs whole
When you lose your job, this program will cover your health insurance premiums for a period of time.
COBRA
Covers employees getting sick or injured on the job.
workman compensation
Pays for your own medical bills if you cause the accident.
medical bills
