Budgeting
What is the term for the amount of money you plan to spend each month?
What is a budget?
The strategy of spreading investments across various financial instruments, industries, and other categories to reduce risk.
What is diversification?
This three-digit number represents your creditworthiness.
What is a credit score?
The deadline for filing federal income tax returns in the United States.
What is April 15?
This term refers to the total value of all goods and services produced in a country in a year.
What is Gross Domestic Product (GDP)?
This type of expense does not change from month to month, such as rent or a car payment.
What is a fixed expense?
A retirement savings plan offered by many employers that provides tax advantages.
What is a 401(k)?
The legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts.
What is bankruptcy?
This term refers to an amount that reduces the income on which you are taxed, typically through deductions and exemptions.
What is adjusted gross income (AGI)?
This financial term describes the reduction in the value of an asset over time, often used for tax and accounting purposes.
What is depreciation?
What percentage of your income is commonly recommended to be allocated to savings?
What is 20%?
This term describes the profit from the sale of an asset, such as stocks or real estate.
What is capital gain?
The maximum amount you can borrow on a credit card.
What is a credit limit?
This tax applies to the profit made from selling an asset held for more than a year.
What is long-term capital gains tax?
This financial statement shows your assets, liabilities, and net worth.
What is a balance sheet?
This budgeting method allocates every dollar of your income to specific categories, leaving no unallocated funds.
What is zero-based budgeting
This type of account offers tax advantages for education expenses.
What is a 529 plan?
This type of interest is calculated on both the initial principal and the accumulated interest from previous periods.
What is compound interest?
This term describes a tax that increases in rate as the taxable amount increases.
What is a progressive tax?
This term refers to the ability to quickly convert an asset into cash.
What is liquidity?
This percentage of your income is commonly recommended for housing costs, including rent or mortgage.
What is 30%?
This financial metric measures the return on an investment relative to its risk, often used to evaluate the efficiency of an investment.
What is the Sharpe ratio?
This act requires creditors to disclose the true cost of credit, including interest rates and fees.
What is the Truth in Lending Act?
This type of tax is taken directly from an employee's paycheck for Social Security and Medicare.
What is FICA tax?
This term describes the cost of an alternative that must be forgone to pursue a certain action or investment.
What is opportunity cost?