"Debt" Vocabulary
A decrease or loss in value.
Depreciation
What is needed to build a strong password?
Letters
Numbers
Special Characters
A federal form completed annually to determine eligibility for financial aid.
FAFSA
The FAFSA should be completed how often?
Every year beginning senior year
An amount of money or purchase that causes pain to part with.
Significant Purchase
What does “Caveat Emptor” mean?
Buyer Beware
True or False? You must establish credit in order to buy a house.
False
A detailed report of an individual's credit history.
Credit Report
Who do predatory lenders mainly target?
Low Income and Military
Money borrowed for education that must be repaid with interest.
Student Loans
Choosing a trade or technical school is best for students who prefer what?
Prefer hands-on career training
Buying an item without thinking about it first.
Impulse Buy
Which of the following describes 'buyer's remorse'?
Regret after a purchase
What are Dave Ramsey’s “Five Foundations” of personal finance?
1. Save a $500 emergency fund.
2. Get out of debt and stay out!
3. Pay cash for your car.
4. Pay cash for college.
5. Build Wealth and Give!
A measure of an individual's credit risk; calculated from a credit report using a standardized formula.
Credit Score
What are the three credit bureaus?
Equifax
TransUnion
Experian
A form of financial aid that does not need to be repaid; often based on financial need.
Grants
What is your greatest wealth-building tool?
Your Income!
The ability of consumers to identify a brand by its logo, slogan, or packaging.
Brand Recognition
What is the primary goal of advertising?
To persuade
What does being upside-down on a loan mean?
Owing more than the asset is worth.
A yearly fee that's charged by the credit card company for the convenience of the credit card.
Annual Fee
What are three of the five components that make up your credit score?
1. Payment History
2. Amount Owed
3. Length of Credit
4. Types of Credit
5. New Credit
A two-year institution offering associate degrees and certifications at lower cost.
Community College
List three ways to avoid student loan debt while still pursuing higher education.
1. Applying for Scholarships and Grants
2. Attend community college first.
3. Working Part-time.
4. Choosing affordable schools.
5. Saving in advance.
The cost of what you give up when making a choice.
Opportunity Cost
What are three steps can you take to avoid impulse buying?
1. Wait Overnight
2. Consider your motives
3. Do Research (never buy anything you don't understand)
4. Consider the Opportunity Cost (what are you giving up)
5. Seek "Wise" Counsel
How does financing a purchase affect you long-term financial goals?
Financing seems convenient but adds interest, creating long term debt. Makes you less financially flexible. Delays and limits opportunities to build wealth.
A method of debt repayment that includes a list of all debts organized from smallest to largest balance; minimum payments are made to all debts except for the smallest, which is attacked with the largest possible payment.
What are at least two consequences of not paying your debt?
Bankruptcy, Repossession, Delinquency, Foreclosure, Garnishment, and Surrender of Collateral.
The comparison of education cost versus potential career earnings.
Return on Investment (ROI)
How does understanding ROI help you make smarter education and career choices?
(Return on Investment) Helps you weigh the cost of schooling against expected earnings to choose education paths that provide real financial return.
Using credit to pay for an item over time.
Financing
Why is it important to consider opportunity cost before making a purchase?
Makes us think about the things we are possibly giving up. (savings, investing, other wants/needs)
How does brand recognition influence spending habits?
Builds trust and emotional attachment, making consumers more likely to purchase familiar names even with a higher price.