1.1
money owed to another person or company (pg. 5)
What is Debt
the granting of a loan and the creation of debt; any form of deferred payment (pg. 8)
What is Credit
financial debts or obligations
What is a liability
the dollar value of a person’s assets is greater than the dollar value of their liabilities
What is Positive Net Worth
the knowledge and skill base necessary for people to be informed consumers and manage their finances effectively
What is Financial Literacy
A person or organization that uses a product or service (pg. 4)
What is a Consumer
person or entity that charges borrowers interest rates above an established legal rate (pg. 8)
What is a Loan Shark
anything that is owned by an individual, including money in the bank or investments
What is an Asset
the dollar value of a person’s liabilities is larger than the value of their assets
What is Negative Net Worth
an expression used to describe a person or household whose monthly income is devoted to expenses and has little to no savings (pg. 5)
What is Paycheck to Paycheck
the additional cost a lender charges for borrowing their money (pg. 8)
What is Interest
the amount by which the value of a person’s assets exceeds or falls behind the value of their liabilities
What is Net Worth
all the financial decisions an individual or family must make in order to earn, budget, save, spend, and give money over time (pg. 4)
What is Personal Finance
the percentage of principal charged by the lender for use of its money (pg. 8)
What is Interest Rate
what a person earns after payroll taxes and other deductions are taken out; often referred to as take-home pay
What is Net Income
a plan of action that allows a person to meet not only their immediate needs but also their long-term goals
What is a Financial Plan
the cost of goods or services; money paid out
What is Expense