Vocab

Question 1

Employer-sponsored retirement plan where you can contribute pre-tax money

Answer 1

401(k)

Question 2

Retirement account funded with pre-tax income

Answer 2

Individual Retirement Account (IRA)

Question 3

Retirement account where you invest already-taxed money

Answer 3

Roth IRA

Question 4

Investment security with diversified portfolio of securities

Answer 4

Mutual Fund

Question 5

A three-digit number indicating credit worthiness that ranges from 280-850

Answer 5

Credit Score

Question 6

Maximum amount you can borrow on a credit card

Answer 6

Credit Limit

Question 7

Percentage of an unpaid loan balance charged as interest

Answer 7

Annual Percentage Rate (APR)

Question 8

Initial amount of a loan

Answer 8

Principal

Question 9

Estimation of income and expenses used to track and plan spending

Answer 9

Budget

Question 10

Take-home pay after payroll deductions

Answer 10

Net Income

Question 11

Difference between assets and liabilities

Answer 11

Net Worth

Question 12

Consistent monthly costs like rent or mortagage

Answer 12

Fixed Expenses

Question 13

Returns earned on principal plus past earnings

Answer 13

Compounding

Question 14

Profit from selling an asset at a higher price than purchased

Answer 14

Capital Gain

Question 15

Investing in various financial assets to reduce overall investment risk

Answer 15

Diversify

Question 16

Ability to make smart financial decisions

Answer 16

Financial Literacy