Banking Basics
This type of account is used for everyday spending and transactions.
What is a checking account?
A plan for how you spend your money.
What is a budget?
A number that shows how trustworthy you are with credit.
What is a credit score?
Putting money into assets to grow your wealth.
What is investing?
The rise in prices over time, reducing your purchasing power.
What is inflation?
This refers to your earnings before taxes and deductions.
What is gross income?
The original amount of money deposited or borrowed.
What is principal?
The percentage of your available credit you're using.
What is credit utilization?
The process of spreading your investments to lower risk.
What is diversification?
Your total debts or financial obligations.
What are liabilities?
The cost of borrowing money or the return on savings is called this.
What is an interest rate?
This fund allows you to save for retirement with employer contributions.
What is a 401(k)?
A loan used to purchase a home.
What is a mortgage?
This earns interest on both the principal and previously earned interest.
What is compound interest?
A contract that provides financial protection against loss.
What is insurance?
This type of account typically earns interest and helps you save money.
What is a savings account?
Money set aside for unexpected expenses.
What is an emergency fund?
The yearly cost of a loan, including fees.
What is APR (Annual Percentage Rate)?
An IRA where you pay taxes now and withdraw tax-free later.
What is a Roth IRA?
Anything you own that has financial value.
What are assets?
This is your income after taxes and deductions.
What is net income?
Your total assets minus your liabilities.
What is net worth?
Money you owe to others.
What is debt?
An individual account to save for retirement.
What is an IRA (Individual Retirement Account)?
Knowledge that helps you make smart money choices.
What is financial literacy?