Taxes
A tax on wages or salary paid to both state and federal governments.
Income Tax.
The cost required for something.
Expense.
Give examples of when would you need to use an emergency fund.
Car tire pops, car crash, injury, AC breaks, etc.
The charge for the privilege of borrowing money, typically expressed as a percentage rate.
Interest.
A personal budget should account for these two main items.
Income and expenses.
Examples of withholdings or deductions from your paycheck.
Income tax, social security tax, child support, etc.
Money received, especially on a regular basis, for work or through investments.
Income.
Describe inflation.
The rising prices of goods & services.
This interest rate must be told by lenders so that you may more easily compare rates.
Annual percentage rate (APR).
Income received prior to taxes and deductions.
Gross pay.
What do the U.S. federal income tax rates range from.
10%-35%.
Percentage of income you should be saving.
10%.
Describe compounded interest.
Interest on interest.
A record (scaled by a rating) of someone's ability to repay debts and demonstrated responsibility in repaying debts.
Credit history/Credit score.
Income after taxes and deductions.
Net pay.
The difference between gross income and net income.
Gross pay is what employees earn before taxes, Net pay is your take home pay after all the withholdings.
Describe discretionary income.
Should Sally take money out of her Emergency fund to go to a Concert with her friends?
No, she shouldn't because a concert isn't an emergency crisis.
Something used as security for repayment of a loan (e.g. a house or car).
Collateral.
Expenses remain unchanged from period to period (ex: mortgage, rent, or insurance).
Fixed expenses.
Describe sales tax.
Percentage of total sale price.
What does SMART stand for?
Specific, Measurable, Attainable, Relevant, and Timebound.
A difference between traditional savings account and a CD account.
A CD, you won't be able to withdraw your money before the account's maturity date without paying a penalty. A traditional account would let you withdraw your money whenever.
In general, the longer the term of the loan, the higher this is.
Interest rate.
These types of expenses fluctuate or change from time to time.
Variable expenses.