Budgeting & Spending
The popular budgeting rule that splits income into 50% needs, 30% wants, and 20% savings.
What is the 50/30/20 rule?
Money that you bring in from labor, a job, or running a small business.
What is income?
APR stands for this important percentage rate on a credit card or loan.
What is Annual Percentage Rate?
FDIC stands for this federal corporation that insures your bank deposits up to $250,000.
What is the Federal Deposit Insurance Corporation?
The "Rule of 72" is a quick mental math trick used to estimate this.
What is how long it takes your money to double?
Items you must have to survive, such as basic food and shelter, as opposed to things you would simply like to have.
What are needs (vs. wants)?
Income that stays the same every single month, like a steady paycheck for a fixed number of hours.
What is fixed income?
The number of years negative items (like missed payments or defaults) typically stay on your credit report.
What is 7 years?
The type of bank account that usually yields the lowest interest rate.
What is a savings account?
If the average annual rate of inflation is 3%, it means this happens to your purchasing power.
What is your money buys less over time (prices go up by 3%)?
This type of tracking method (like a notebook or digital app) records every single dollar you spend so you can see where your money leaks.
What is a spending log?
Income that can change from month to month, like earnings from tips, commission, or freelance babysitting.
What is variable income?
This type of auto or personal insurance covers damage or injuries you cause to other people in a car crash.
What is liability insurance?
CD stands for this type of bank deposit that locks your money away for a set time at a fixed rate.
What is a Certificate of Deposit?
This kind of student loan requires you to start paying the interest while you are still in college.
What is an unsubsidized student loan? (Note: subsidized loans don't require interest payment while in school)
An extra pool of money set aside strictly for unexpected surprises, like a broken phone screen or car repair.
What is an emergency fund?
The document an employer gives you in January that shows your total earnings and the taxes withheld for the previous year.
What is a W-2 form?
Making minimum payments on a high-interest credit card instead of paying the balance in full causes this to happen to your total cost.
What is paying more in interest (or growing debt)?
This retirement account lets your money grow tax-free, and you contribute after-tax dollars.
What is a Roth IRA?
Besides gas and insurance, owning a car often hits you with this yearly local tax based on the vehicle's value.
What is property tax (on a vehicle)?
The percentage of a typical teen’s income that actually comes from parents rather than jobs or side hustles (according to financial data).
What is 70%?
The term for gross pay minus all taxes, health insurance, and retirement deductions.
What is net pay (take-home pay)?
The 3-digit score used by lenders to decide how "trustworthy" you are with borrowed money.
What is a credit score?
Most self-made millionaires don't achieve their wealth this way.
What is inheriting wealth? (rather, they build it/invest it themselves)
A mathematical concept that describes why your earnings start generating their own earnings.
What is compound interest?