Personal Finance Flashcards
Why are banks safe places for your money?
they are insured
What are the key differences between a commercial bank and a credit union?
commercial bank is for-profit
a credit union is not for profit, pay higher interest rates abd charge lower fees
What is the difference between FDIC and NCUA?
FDIC- insures banks and other types of institutions
NCUA- insures credit unions
What are the key differences between a checking and savings account?
checking account provides an east method for transferring money. use deposited money anytime
savings account is designed to hold money not spent on current consumption
If you overspend from your checking account what fee may you expect?
overdraft fee
What are the key differences between payroll and income taxes?
income tax is determined by earned and unearned income.
payroll tax is on earned income that supports FICA
Who is Medicare designed to help?
senior citizens
What is a sales tax?
a tax o items purchased in retail stores
What is property tax?
a tax on property, such as land, buildings, and motor vehicles
What is an excise tax?
taxes charged on consumption items
What is the formula for net worth?
assets-liabilities= net worth
What is a liability?
What is owed to others
How can you increase your net worth?
decrease liabilities, increase assets
What is a contractual expense?
required to pay expense for a specific amount of time- not easy to reduce or eliminate
How do you find net gain or net loss?
income-expenses= net gain/loss
