Ch 2
What are intermittent expenses?
occur at various times throughout the year; tends to be large, lump sums
what is compound interest?
Interest on interest
What does principal mean in terms of a loan?
Amount of money being borrowed
How do states that don't have sales tax make money?
If you plan on moving after a month is it better to rent or buy and why?
Rent, when buying you usually have to stay for a while or will be paying it off for a long period of time
What are discretionary expenses?
expenses of want items
What does FDIC stand for?
Federal Deposit Insurance Corporation
What is the difference between interest and term?
term is the time you have to pay back the principal and interest is a rate that you are being charged for borrowing money
What is tax liability?
The total amount you owe
If you just got a stable job set up and are out of school and want to move to a new state should you rent or buy?
Buy, having a stable job shows that you plan on staying for a while.
Fixed
Variable
Intermittent
Discretionary
What are the three basic reasons to save
Build your Emergency Fund
Large Purchases
Wealth building
What does APR stand for and what is it?
Annual Percentage Rate ; interest charged over 12 months
What states don't have sales tax?
Alaska, Delaware, Montana, Oregon
What is something to consider before getting a roomate?
What can you afford
What traits or characteristics are you okay or not okay with
Responsibilities
explain the difference between fixed and variable expenses
Fixed remain the same each month while variable change in price but are expected from month to month
What is the most common way to save?
A traditional savings account
what are the 5 C's of credit
Character, Capacity, Capital, Collateral, and Conditions
Gross income is your total revenue, so what is net revenue?
your revenue after all taxes, fees, and deductions are taken out
What is a mortgage?
a home loan
List two of the four steps of budgeting
Track Income/Expenses
Based on tracking
Determine Categories: utilities, food, pets, etc
Divvy up $$$ to each category
Continue to track/stay within budget
Re-Evaluate
Name each type of way to save?
- Traditional savings account
- Online savings account
- Certificate of Deposit
- Money Market Account
Name all sources of credit
Installment, Revolving, Secured, Unsecured
What state has the lowest sales tax and what percent is it?
Colorado at 2.9%
what is the typical percent for a down payment on a home?
10%-20%