Banking
This saving strategy involves putting a certain percentage of each paycheck directly into a savings account to save for a rainy day.
What is an emergency fund?
This type of expense can change from month to month, such as an electricity bill.
What is a variable expense?
This is the payment you make to an insurance company for your coverage, regardless of whether you use services.
What is a premium?
This is generally better suited for long-term wealth building and retirement, while saving is better suited for short-term purchases and emergencies.
What is investing?
Making these on time is one of the most important ways to improve or maintain a good credit score.
What are payments?
Unlike a debit card, this type of card gives you access to borrowed money that must be paid back later.
What is a credit card?
The sooner you do this for your retirement, the better.
What is save money?
This budgeting strategy means putting money into savings before you begin spending your paycheck.
What is “pay yourself first”?
This is the percentage of covered medical expenses you are responsible for paying after your deductible is met.
What is coinsurance?
This allows you to earn returns not only on the money you originally saved, but also on the interest you have already earned.
What is compound interest?
Applying for several credit cards within a short period of time can negatively affect this.
What is your credit score?
An auto loan is an example of this type of debt because the vehicle serves as collateral.
What is secured debt?
Unlike investing in the stock market, this type of account is generally easy to access through an ATM, debit card, or check.
This budgeting strategy involves putting cash for different spending categories into separate envelopes and only spending the money available in each envelope.
What is envelope budgeting?
This type of auto insurance coverage can help pay to replace a car window damaged during a break-in.
What is comprehensive coverage?
When newly issued bonds offer lower interest rates than an existing bond, the existing bond becomes more attractive to investors, causing its market price to move in this direction.
What is increase?
This website is specifically authorized by federal law to provide a free credit report
What is AnnualCreditReport.com?
Making only the minimum payment on a credit card, especially when combined with late payments, can lead to this outcome.
What is a higher overall borrowing cost?
Low-balance alerts, unusual-activity alerts, mobile check deposit, and online bill pay are examples of these.
What are online/mobile banking features?
This budgeting principle divides take-home pay among needs, wants, and savings, helping people prioritize their financial goals.
What is the 50/20/30 rule?
This type of insurance can help replace a percentage of your income if you become unable to work because of a injury or illness.
What is disability insurance?
This strategy reduces investment risk by spreading money among different investments.
What is diversification?
When reporting an error on your credit report, you should provide this along with an explanation of the mistake.
What is evidence supporting your claim?
A credit card's Schumer Box provides important information about this, including the range a cardholder may be charged.
What is the APR?
This type of financial institution insurance protects your deposits, up to the applicable limit, if an insured bank or credit union fails.
What is FDIC/NCUA insurance?
Aaron has gone over budget for two months in a row. Instead of cutting necessities or reducing his savings, he wants to stop making extra payments toward his student loan and credit card debt. A more appropriate response would be for Aaron to do this.
What is reducing unnecessary spending, such as subscriptions or dining out?
An insurance company charges policyholders premiums even when they never file a claim. The company can still remain profitable while paying covered claims by doing this.
What is collecting more in premiums than it pays out in claims?
An investor should understand this before investing so their portfolio reflects the amount of risk they are comfortable taking.
What is risk/risk tolerance?
This type of bankruptcy eliminates most unsecured debts and may involve selling your assets to repay creditors.
What is Chapter 7 Bankruptcy?
Unlike an adjustable-rate mortgage whose rate can change based on market conditions, this type of mortgage is where the interest rate stays the same.
What is a fixed-rate mortgage?
Daniel is opening his first checking account at a financial institution. Before choosing a checking account, he wants to avoid unnecessary fees, make sure he can conveniently access his money, and protect his deposits. These three things are what Daniel should consider when opening his account with a financial institution.
What are the account fees, nearby ATM access, and whether the institution is FDIC/NCUA insured?
Chase keeps going over budget because he spends too much on optional purchases. He wants to make his budget is more effective without cutting necessary expenses. This is the type of spending that Chase should eliminate first.
What is discretionary spending, such as non-essential wants?
Insurance companies use money collected from many policyholders to help pay the claims of those who experience covered losses. This concept spreads financial risk among a group.
What is risk pooling?
This type of fund automatically adjusts its asset allocation as the investor gets closer to a selected retirement year.
What is a target-date fund?
Two people each have several debts they are trying to pay off. One person wants to pay the least amount of interest possible, while the other wants the psychological motivation of eliminating small debts first. The two debt repayment methods are known as these.
What are the High Rate (Avalanche) Method and the Debt Snowball Method?
A credit card advertisement lists several APRs in its Schumer Box. Mallorie, who has excellent credit, receives the lowest advertised APR, while Marcos, who has weaker credit, is offered a higher APR from the same card. Both applicants are approved. This factor most directly explains why the two applicants received different APRs.
What is their credit history?