Chapter 2 Saving
The five steps to financial success
Five Foundations
A written cash flow plan
Budget
a decrease or loss in value
depreciation
a form of federal or state financial aid that does not need to be repaid; usually given to students who demonstrate financial need
Grant
latin term for "buyer beware"
Caveat emptor
interest paid on interest previously earned; credited daily, monthly, quarterly or semiannually
compound interest
A copy of each check you write.
Carbon Check
a yearly fee that's charged by the credit card company for the convenience of the credit card
annual fee
A program that allows students to work part time while continuing their studies
work study
feeling regret or concern after making a large purchase
buyer's remorse
Five hundred dollars in readily available cash to be used only in the event of an emergency; the goal of the first foundation
Emergency fund
When money is withdrawn from a bank account and the available balance goes below zero
Overdraft
type of card issued by a bank that allows users to finance a purchase
Credit card
A form of financial aid that does not need to be repaid; usually awarded on the basis of academic, athletic or other achievements
scholarship
To buy an item with credit; paying over time
Financing
Saving money over time for a large purchase
Sinking fund
A cash flow plan that assigns an expense to every dollar of your income, where the total income mins the total expenses equals zero
Zero-Based Budget
A detailed report of an individuals credit history
credit report
1 trillion
the estimated student loan debt
The process of communicating the value of a product or service to customers
marketing
Percentage paid to a lender for the use of borrowed money (in debt); percentage earned on invested principal.
Interest rate
To match your bank statement with your checkbook
Reconcile
an expense, such as a charitable contribution, that can be deducted from one's taxable income
tax deduction
pay with cash as you go instead of using credit or debt
cash-flow
the promotion of a product or service by identifying it with it with distinct characteristics (usually associated with public perception, quality or effectiveness)
Branding