Lesson 1
all the financial decisions an individual or family must make in order to earn, budget, save, spend, and give money over time.
What is - Personal Finance
the granting of a loan and the creation of debt; any form of deferred payment
What is - Credit
Financial debts or obligations
What is - Liability
Anything that is owned by an individual, including money in the bank or investments
Money owed to another person or company
Person or entity that charges borrowers interest rates above an established legal rate
What is - Loan Shark
the amount by which the value of a person’s assets exceeds or falls behind the value of their liabilities
What is - Net Worth
The dollar value of a person’s assets is greater than the dollar value of their liabilities.
What is - Positive Net Worth
a person or organization that uses a product or service
The percentage of principal charged by the lender for use of its money
What is - Interest Rate
A plan of action that allows a person to meet not only their immediate needs but also their long-term goals
What is - Financial Plan
What a person earns after payroll taxes and other deductions are taken out; often referred to as take-home pay
An expression used to describe a person or household whose monthly income is devoted to expenses and has little to no savings
What is - Paycheck to Paycheck
the additional cost a lender charges for borrowing their money
What is - Interest
the cost of goods or services; money paid out
What is - expense
The dollar value of a person’s liabilities is larger than the value of their assets
What is - Negative Net Worth
The five categories to consider when managing your money
What is - Earning, Budgeting, Saving, Spending, and Giving
The total amount of money earned by an individual or business before any taxes, fees, or deductions are removed.
What is - Gross Income
The third foundation is:
What is - Pay cash for your car
The knowledge and skill base necessary for people to be informed consumers and manage their finances effectively
What is - Financial Literacy