Key Terms
Saving
Putting money aside for future use
Everyday Savings
a safe place to ‘stow away’ money separate from your chequing account. When you keep your savings separate from your chequing, you can take advantage of the ‘out of sight, out of mind’ principle
Stocks
you buy a stock or share of a company - A high risk, but high interest, way to invest money
What is the average interest rate on a credit card?
~20% (18-29%)
OSAP
Ontario Student Assistance Program - Loans and grants given specifically to students to pay for post-secondary. Federal loans are interest free
Budget
A plan to manage money -- how much to spend and how much to save
Chequing Account
An accessible account for everyday spending
Mutual Fund
Rewards Points
Points that can be used for various things based on the credit card (eg. PC Optimum Points, dining points, use to pay off balance, upgrade travel)
A loan from the bank specifically for buying a home - usually over approx 25 years
Investing
Purchasing/saving in an account that is expected to increase in value or produce income
TFSA
Tax Free Savings Account - an account for long or short term saving, high interest, tax free withdrawls
Bonds
A medium interest/medium risk account - a loan rather than ownership like a stock
Credit Score
three-digit number between 300-900 that predicts how likely you are to repay borrowed money on time. A low score means unreliability and a high score means very reliable. Used by landlords, lenders, employers etc.
Payday/Cash Advance
Places like Money Mart -- HUGE interest rates, not a good idea!! Will loan you a heckkkk ton of money
Credit
Access to funds that belong to financial institutions, with the expectation to pay back what has been borrowed
RRSP
Registered Retirement Savings Account - high interest savings account, specifically designed for saving for retirement, tax deductible contributions
GIC
Guaranteeed Income Investment - low interest but no risk, individual cannot access their money
Statement Date
(or statement closing date) is the last day of your monthly billing cycle when the issuer tallies your charges, calculates your balance, and generates your bill
Bankruptcy
A way to have debt forgiven when you are in a rock bottom situation -- credit score is SEVERELY impacted by this
Interest
the cost of borrowing money, or the money earned from an investment. When an individual borrows money, interest will often be charged in addition to the amount borrowed.
FHSA
Rank the following in order from lowest to highest risk investment - you can use the whiteboard
GIC, Stocks, Mutual Funds, Bonds
Highest to Lowest Risk:
1. Stock
2. Mutual Funds
3. Bond
4. GIC
APR
Annual Percentage Rate - The cost of borrowing money on a credit card including the interest and late payment fees
Line of Credit
a flexible loan that lets you borrow money up to a set limit and pay interest only on the amount you actually use