Vocab Words Flashcards
Dependents
a person who relies on another, especially a family member, for financial support.
Gross Wages
the total amount of money an employee earns before taxes and deductions are taken out
Garnishment
a legal procedure in which a person’s earnings are required by court order to be withheld by an employer
Human Capital
a concept used by economists to designate personal attributes considered useful in the production process
Inflation
the rate of increase in prices over a given period of time
IRS (the bad people)
the Internal Revenue Service (IRS) administers who enforces U.S. federal tax laws
Money Order
an order issued by a post office, bank, or telegraph office for payment of a specified sum of money usually at any branch of the issuing organization
Net Pay
the amount of money an employee receives after deductions are taken from their gross pay
U.S Treasury Department
a government agency that manages the country’s finances
Windfall Income
a sudden and unexpected increase in income, such as winning the lottery or inheriting money
Discretionary Income
income remaining after deduction of taxes, other mandatory charges, and expenditure on necessary items
Opportunity Costs
the potential forgone profit from a missed opportunity
Fixed Expense
an expense for a company that is the same amount every time it is paid
Variable Expense
a cost that changes based on the level of activity, such as production or sales
APR
annual percentage rate (APR) is the cost of borrowing on a credit card
Compound Interest
when you earn interest on the money you’ve saved and on the interest you earn along the way
Federal Reserve Bank (Fed)
the U.S. central bank, created by the Federal Reserve Act of 1913 to establish a monetary system that could respond effectively to stresses in the banking system
Interest
the cost of borrowing money
Rule of 72
an easy way to calculate how long an investment will take to double in value given a fixed annual rate of interest
Simple Interest
an interest charge that borrowers pay lenders for a loan
Cashier’s Check
a check that is issued by a bank
Certificate of Deposit
a savings account that holds a fixed amount of money for a fixed period of time, and in exchange, the issuing bank pays interest
Certified Check
a personal check that the payer’s bank has certified to be legitimate
FDIC
Federal Deposit Insurance Corporation. an independent agency created by Congress to maintain stability and public confidence in the nation’s financial system
Liquidity
the ability of a company or an individual to settle short-term liabilities easily and on time
Money Market Account
a type of account offered by banks and credit unions
Predatory Lending
the fraudulent, deceptive, and unfair tactics some people use to dupe us into mortgage loans that we can’t afford
U.S Savings Bond
a government bond that offers a fixed rate of interest over a fixed period of time
Bankruptcy Chapter 7
a legal process where an individual or business files to liquidate their non-exempt assets
Bankruptcy Chapter 13
a court-supervised plan that allows people with a regular income to repay their debts over time
Collateral
valuable property owned by someone who wants to borrow money
Credit Score
a number that represents your credit risk, or the likelihood you will pay your bills on time
Lien
a charge upon real or personal property for the satisfaction of some debt or duty
Liquidation
the process of closing a business and distributing its assets to claimants
Mortgage
a loan that allows you to purchase property
Repossession
when a lender takes back property that was used as collateral for a loan because the borrower has not made payments
Secured Loan
loans that are secured by a specific form of collateral, including physical assets or liquid assets
Unsecured Loan
a loan that doesn’t require any type of collateral
Variable Rate
an interest rate that can change over a period of time
Beneficiary
the person that you legally designate to receive the benefits from your financial products
Deductible
the amount of money that the insured person must pay before their insurance policy starts paying for covered expenses
Premium
an amount to be paid for an insurance policy
Bear Market
a market in which prices are falling
Bull Market
a market in which prices are rising
Bond
a loan to a company or government that pays interest over time
Stock
a share in the ownership of a company
Dividends
a sum of money paid regularly by a company to its shareholders out of its profits
Mutual Fund
funds that let you pool your money with other investors to “mutually” buy stocks, bonds, and other investments
S&P 500
a market-capitalization-weighted index of 500 leading publicly traded companies in the US
Treasury Bill
a short-term U.S. government debt obligation backed by the U.S. Department of the Treasury
Volatility in Stock Market
how much and how quickly prices move over a given span of time
401K
a feature of a qualified profit-sharing plan that allows employees to contribute a portion of their wages to individual accounts
Asset
property owned by a person or company
Consumer Price Index
a measure of how prices change over time for a representative group of consumer goods and services
Net Worth
the total wealth of an individual, company, or household, taking account of all financial assets and liabilities
Pension
a fixed sum paid regularly to a person
Roth IRA
an Individual Retirement Account to which you contribute after-tax dollars
Traditional IRA
an Individual Retirement Account that lets your earnings grow tax-deferred. You pay taxes on your investment gains only when you make withdrawals in retirement
Will
a legal declaration of a person’s wishes regarding the disposal of his or her property or estate after death
