Ways to Make Money
The difference between gross and net income is:
gross income is before deductions, net income is after deductions.
The 50-30-20 Budget categories are:
50 - needs
30 - wants
20 - savings
Banks are:
for profit institutions owned by shareholders with a goal to make money.
Debits vs credits are:
Bank reconciliation is:
a process in which you compare a bank statement to the transactions you have made in your own financial records to ensure they match.
3 examples of mandatory deductions are:
-CPP (Canada Pension Plan)
-EI (Employment Insurance)
-Federal income tax
-Provincial income tax
Variable expenses are:
expenses that change from month to month.
Credit Unions are:
not-for-profit institutions owned by members who receive lower interest rates and fees for being members.
The difference between interest earned and interest charged is:
interest earned is interest on savings that you gain, but interest charged is what you owe on loans.
How often should you do bank reconciliation for your personal account?
Monthly
The 4 types of employment income are:
-wages
-salary
-commission
-piecework
Fixed expenses are:
expenses that stay the same each month.
Lending Agencies are:
The middle man between clients and financial institutions offering loans, who help compare options.
Two examples of fees are:
statement print charge: a printed bank statement that is mailed out to you each month.
service charges: fees for owning an account at that particular institution.
What are 3 reasons a transaction that you have written down might not show up on your bank statement?
a cheque hasn't cleared
a credit card payment hasn't cleared
an error has occurred
3 other ways to receive income besides employment income are:
-self employment
-investment income
-inheritance
3 examples of fixed expenses are:
rent
internet
phone bill
subscriptions
Trust Companies are:
Legal institutions that help with wealth management, estate planning, or tax planning.
Overdrafts and overdraft protection means:
overdraft is when you spend more money than what you have in your account and owe the financial institution for it, while overdraft protection is linking another account of yours to your main account to ensure that if you go over what is in your main account you continue to use your own money and not borrow.
What are the 5 reasons to do bank reconciliation?
Ensuring that all deposits are correct, and checking for any outstanding deposits.
Ensuring that all expenses you have incurred are correct, and checking for any outstanding cheques that have not cleared.
Identifying discrepancies and determining what is causing them.
Resolving differences between the two accounts until they are both equal.
Maintaining accurate records to avoid overdraft or fraud.
The 3 types of investment income and a brief description of each are:
-Interest: gained from savings accounts.
-Dividends: payouts from being shareholders.
-Capital Gains: income from selling assets that have increased in value such as real estate or stocks.
3 examples of variable expenses are:
gas
groceries
hydro
clothing
gifts
A dangerous financial institution to avoid is ______ because___________.
Places offering payday loans because they have easy to obtain loans with huge amounts of interest.
The difference between certified cheques and bank drafts is:
certified cheques are certified by your financial institution to ensure the recipient knows that the amount the cheque is written for exists in your account, bank drafts are direct transfers of large sums from the bank to the recipient for things such as real estate.
Two ways to see if a transaction is fraudulent are:
if the account owner did not make the transaction
if the transaction is at a foreign location nowhere near the account owner