Values and Money
The first and most important rule of building wealth
Budget category for groceries, restaurants, take-out, coffee shops, entertainment, and similar expenses
What is "variable spending" or "day-to-day spending?"
A savings account that offers higher interest than a regular savings account, often at an online bank
What is a high yield savings account?
The first rule of wise credit card use, that helps you build and maintain good credit
What is "pay your balance before the due date?"
Money you make not just on the initial investment, but on the earnings
What is compound interest?
The second rule of building wealth: when you put aside a portion of any income that comes in, and figure out how to live on the rest
What is "pay yourself first?"
Best way to deal with fixed expenses, like mortgage, car payments, and other expenditures that are the same amount every month
What is "set 'em and forget 'em," and review every quarter
A product banks offer that provide a fixed interest rate, but you have to pay a penalty if you withdraw funds before the end of the term
What is a Certificate of Deposit (CD)?
One important way to never pay interest on a credit card balance
What is "pay your balance in full every month?"
When you own a portion of a company, you own this. If the value of the company increases, you make money
What is a stock, or a share?
Spending on something because everyone you know spends that way
What is "default spending?"
Implementing a hold for a period of time on any purchases over a certain amount of money; putting a picture of your primary goal on your credit or debit card; having a "no spend" month
What are some ways to avoid impulse buying?
The government-backed insurance company that provides up to $250,000 per type of account per account holder if a bank fails
What is the FDIC?
What is the only site you should use to get your three, free annual credit reports from each of the three reporting agencies?
A loan you make to a company or government entity, with the promise that you will get your money back plus a fixed rate of interest at the end of the term
What is a bond?
Spending on the things most important to you and slashing spending on everything else, even when your friends and family may give you a hard time about that
What is "values-based spending"?
Important budget category that many people forget to include in their budget
What is "savings"?
A card attached to a bank account that is somewhat less safe to use than a credit card, but only allows you to spend the amount of money you have in the bank
What is a debit card?
The percentage of your credit limit that you spend
What is "Utilization Rate?"
A mutual fund tied to an market index (like the S&P 500), that usually has low fees because it's managed automatically rather than by a person
What is an index fund?
Currency of time you have to spend to earn enough to buy something
What is "life energy" (is it worth it to spend that much time for that item)?
Money you put aside each month for expenses you know will come up at some point during the year, but that you don't pay for every month
What are Sinking Funds?
When someone has money in several CD's with different terms, so funds will be available on a staggered basis as the terms end
What is a CD ladder?
The three credit reporting agencies
What are Experian, Equifax, and Transunion?
A tax-advantage retirement account that does not give you a tax break in the year you invest, but you never have to pay taxes in the future either on your initial investment or on earnings
What is a Roth IRA?