Budgeting basics
Rent or Mortgage Payment
What is a Fixed Expense?
To keep money safe and available for future use.
What is the primary goal of a savings account?
A share of ownership in a company.
What is a stock?
The typical range for most credit scores.
What is 300-850?
A student loan used to pay for education.
What is considered good debt?
To plan and control how you spend your money
What is the purpose of a Budget?
Type of savings account that typically offers the highest interest rate.
What is Certificate of Deposit (CD)?
Spreading investments across different assests to reduce risk.
What is diversification?
A measure of your creditworthiness.
What is a credit score?
Money you owe to others.
What is debt?
Utility bills, such as an electric bill.
What is a Variable Expense?
A savings account that offers a higher interest rate than a regular savings account.
What is a high-yield savings account?
Your willingness to endure potential losses in your investments.
What is risk tolerance?
APR stands for what in relation to credit.
What is Annual Percentage Rate?
Legal action and damage to your credit score.
What is defaulting on a loan?
To cover unplanned expenses or financial emergencies.
What is the purpose of an emergency fund?
Interest earned on both the initial deposit and previously earned interest.
What is compound interest?
A collection of stocks, bonds, or other securities managed by a professional.
What is a mutual fund?
To provide a detailed history of your borrowing and repayment activities.
What is the purpose of a credit report?
A loan used to pay off multiple debts, combining them into one payment.
What is a debt consolidation loan?
50% needs, 30% wants, 20% savings
What is the 50 / 30 / 20 Rule?
To take advantage of compound interest over time.
What is starting a savings early?
A fund that tracks a specific index or sector and is traded on an exchange.
What is an ETF, Exchange-Traded Fund?
The maximum amount you are allowed to borrow on a credit card.
What is a credit limit?
To replace an existing debt with a new one, usually with better terms.
What is refinance a debt?