SLS test Flashcards
50/30/20 Budget
A budgeting method that allocates 50% to needs, 30% to wants, and 20% to savings and debt repayment.
Auto Lease
A type of auto financing that allows you to “rent” a car from a dealership for a certain length of time and amount of miles. Once the time period ends, you either return the car or purchase the car if that is an option in your contract.
Budget
A plan of your expected income and how you will use it to meet your expected expenses over a period of time.
Cash Envelope Budget
A budgeting method where money for monthly spending is taken out in cash and placed in labeled envelopes according to budget categories. Spending occurs only from the corresponding envelopes.
Cost of Living
The amount of money needed to sustain a certain level of living, including basic expenses such as housing, food, taxes, and healthcare; often used when comparing how expensive it is to live in one city versus another.
Deduction
Any items subtracted from your paycheck, including state and federal income taxes, Social Security, health insurance or 401(k) contributions.
Deficit
When your expenses exceed your income
Down Payment
A portion of the total cost of an item, such as a car or house, that must be paid at the time of purchase. The buyer will often take out a loan to finance the remaining balance.
Expenses
Items or services you pay for such as rent, groceries, entertainment, bills, etc.
Fixed Expense
A cost that can be expected at regular intervals and that remains the same amount (e.g., monthly rent payment)
Freelancer
An individual who earns money on a per-job or per-task basis, usually for short-term work. They are not employees of an organization.
Gig Economy
A labor market where the majority of people have short-term jobs or gigs such as freelancing and temp jobs rather than long-term employment.
Gross Pay
Total earnings before any deductions are taken.
Income
Money that is received from work, investments, business, etc.
Needs
Expenses that are essential for you to be able to live and function.
Net Pay
Total earnings after payroll taxes and other deductions have been taken out; also called take-home pay.
Pay Yourself First
strategy where you save a specified amount of your paycheck before doing anything with the rest of your money.
Renters Insurance
A form of property insurance, available to renters, that covers losses to their personal property and protects the insured person from liability claims.
Residential Lease
A contract between a tenant and a landlord providing the terms and costs for renting the property
Salary
A fixed amount that you are paid over a period of time, regardless of how many hours you work.
Surplus
When your income exceeds your expenses, and you have money left over.
Unit Price
The cost for one item or measurement that allows it to be easily compared to other similar products to evaluate which is a better deal.
Utilities
The basic services your home, apartment, or business needs to keep it comfortable and functioning properly (e.g. water, electricity, etc.)
Variable Expense
A cost that appears irregularly or that changes in amount (e.g., utility bills)
Wage
A set amount you are paid for every hour that you work; also called hourly pay.
Wants
Expenses that help you live more comfortably.
Wealth
A measurement of your assets (money you’ve saved or things of value you own) minus your liabilities (money you owe others); also called net worth.
Zero-Based Budget
A budgeting method where every anticipated earning is assigned a role to be spent, saved, or invested somewhere, so there’s no “leftover” money with no purpose.
Depreciating Assets
Is an asset that loses or decreases in value. Example: Car/Automobile
Appreciating Assets
Is an asset that gains or increases in value. Example: Real Estate
Mortgage Escrow Accounts
are used to collect and pay 1) property taxes and 2) insurance payments on a home. Lenders want to make sure that your property is insured and that the taxes are paid on time, reducing the risk to the bank that you will default on the loan or incur liens on the property.
Tax Lien
secures the government’s interest in your property when you don’t pay your tax debt. You can not refinance or sell before paying the Things you Consider when shopping for a mortgage
a. Term – the amount of years
(15yr./30 yr.)
b. Type of Interest
Variable Rate vs. Fixed Rate
c. Interest Rate
Shop around
Don’t believe what they say.
Ask for everything in writing. Tax Lien on your property.
Amortization Table
An amortization schedule, often called an amortization table, spells out exactly what you’ll be paying each month for your mortgage. The table will show your monthly payment, how much of it will go toward your loan’s principal balance, and how much will go toward interest. It basically shows how much in principal and interest is paid overtime.
