Unit 5 Flashcards
APR
Annual Percentage Rate- the rate you’re charged for borrowing money.
Bank Statement
Lists all your deposits, cash withdrawals, check withdrawals, electronic transactions, service charges, and beginning and ending balances.
Budget
A spending and saving plan based on your income and expenses.
Checking Account
An account that gets interest if you leave your money in it.
Compound Interest
More powerful than simple interest. Earning interest on top of interest.
Debit Card
Combine the function of checks and atm cards. Money is taken right out of your checking account.
Deductions
Expenses subtracted from adjusted gross income.
Deposit
Money put into an account.
Pay yourself first
Always put money away for yourself before paying for ANYTHING.
Endorse
Sign the back of a check in order to deposit or cash the amount specified Bank statement.
How to protect yourself from identity theft
shred all cards and documents that give personal information.
Fee
Money you pay to the government
Gross Pay
The money gotten from wages before taxes are taken out.
Income Tax
tax on what you make.
Interest
Money paid to the lender by the borrower for allowing them to borrow money.
IRA
Individual Retirement Account
IRS
Internal Revenue Services
Loan
Borrow money from your bank or other lending institution to pay for cars, homes, education, etc.
Credit
money that you use to buy homes, cars, and live comfortably.
Net Pay
The remaining amount of money left in an employee’s gross pay after been taken out.
What makes a successful Budget
a spending plan.
W-2
Gotten at the end of the year.
W-4
Get when you start a job tells your employer how much to withhold from taxes.
Withdraw
When you take money out of your account
What percent should you save (at least)
10% of wages/salary
SMART goals
Specific, Measurable, Attainable, Relevant, Time base.
Credit Line
An arrangment in which a bank or vendor extends a specified amount to a specified borrower for a specified time period.
Good vs. bad on credit
it can help you purchase things such as a home although it can get you into debt, a bank may have a fee you have to pay for a certain amount of time that you’re in debt.
Collateral
Something of value held by a bank case you don’t pay.
4 types of credit
Charge Cards, Credit Cards, Installment Credit, and Loans.
Types of saving accounts
Bonds and Stocks
Rule of 72
This is a quick way to calculate how long it will take to double your money if it is invested at a particular interest rate. It is all about the power of time. You take the interest rate you expect torn and divide it into 72.
Cosigner
An individual other than the borrower who signs a promissory note and thereby assumes equal liability for it.
Credit Agreement
contract that binds you (the lender) and the borrower to the credit terms defined.
Annual fee
fee you pay yearly for the card.
Grace Period
time where you can pay your bill without a charge.
Credit scores (what’s a good score, what’s a bad score)
630 or less is bad and 720-850 is excellent.
3 credit bureaus
Transunion, Experian, and Equifax
How to write a check
draw it
Balance/reconcile
Making sure what you have in your check register and what your bank statement says matches up.
