Finance Vocabulary
Value of the option you give up.
What is opportunity cost
You save money in this place to keep it safe and earn a little interest.
What is a savings account?
Food, water, and a place to live are examples of these.
What are needs
This is the set of beliefs and priorities that guide how someone spends, saves, and invests their money.
What are financial values
This is the total amount of money earned before any deductions.
What is gross salary
Method of weighing the costs against the benefits of an action, a purchase, or a financial decision.
What is cost-benefit analysis
You do this first to make sure you save money before spending on other things.
What is “pay yourself first”?
Buying a luxury car when a reliable used one would do is an example of this kind of expense.
What is a want
If someone values security, they’re more likely to prioritize this financial goal over risky investments.
What is saving
This government deduction from your paycheck helps fund retirement benefits for older Americans.
What is Social Security tax?
a fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum
What is salary
This is a goal to stop owing money to others.
What is paying off debt?
This budgeting rule suggests dividing your income into 50% needs, 30% wants, and 20% savings.
What is the 50/30/20 rule?
This value may cause a person to avoid credit card debt, even when tempted to spend more.
What is responsibility
When comparing two job offers, it’s smart to look at this, which includes salary, benefits, and other perks.
What is total compensation
The additional compensation employers must provide to employees for working beyond a predetermined threshold of hours, usually 40 hours per week.
What is overtime wage
This goal is achieved when your total assets exceed your liabilities, representing your financial health.
What is a positive net worth?
You lost your job, so you cut out cable, dining out, and online shopping. These are examples of cutting back on this type of spending.
What are wants?
A person who values independence may work hard to achieve this financial milestone early in life.
What is financial independence?
This negotiation tactic is important when discussing salary during a job offer, especially if you have in-demand skills.
What is salary negotiation
The process of assessing the current financial situation of a business to identify future financial goals and how to achieve them
What is a financial plan
Saving for this major life event often involves financial goals like buying a home or starting a family.
What is a life milestone?
This financial term refers to prioritizing essential spending and saving over discretionary expenses.
What is financial discipline?
This is the term for a personal goal, such as buying a house or retiring early, that reflects individual values.
What is a financial goal?
his amount is often listed in a job posting to indicate how much you'll earn per year.
What is annual salary?