Personal Finance Basics
What is the amount of money you earn after taxes and deductions?
What is net income?
What is the 50/30/20 rule in budgeting?
What is 50% of your income goes to needs, 30% to wants, and 20% to savings or debt repayment?
What is a credit score?
What is a number that represents your creditworthiness based on your credit history?
What is interest?
What is the cost of borrowing money, usually expressed as a percentage?
What is the main purpose of a 401(k) plan?
What is to help individuals save for retirement with tax advantages?
What document lists your income and expenses over a given period, usually a month or year?
What is a budget?
What is an automatic savings plan?
What is setting up an automatic transfer from checking to savings every month?
What is the difference between a secured and unsecured loan?
A secured loan is backed by collateral, while an unsecured loan is not.
What is an asset?
What is something of value that you own?
What is compound interest?
What is interest calculated on both the initial principal and the accumulated interest from previous periods?
What is the difference between a checking account and a savings account?
A checking account is for daily transactions, while a savings account is for saving money and usually offers interest.
What does "pay yourself first" mean in terms of budgeting?
What is setting up an automatic transfer from checking to savings every month?
What is the consequence of missing a payment on a loan?
What is your credit score may decrease, and you may incur late fees or penalties?
What is a liability?
What is a financial obligation or debt?
What is Social Security?
What is a federal program that provides retirement, disability, and survivor benefits?
What does FDIC stand for and what does it insure?
What is the Federal Deposit Insurance Corporation, which insures deposits in banks up to $250,000?
What is a sinking fund?
What is a savings account set aside for a specific future expense, like a vacation or a new car?
What is the purpose of a credit report?
What is to provide a detailed history of your credit activity to lenders?
What does it mean to "refinance" a loan?
What is replacing an existing loan with a new one, typically to get better terms or a lower interest rate?
At what age can you typically start withdrawing from a 401(k) without penalty?
What is 59½?
What is the primary goal of having an emergency fund?
What is to cover unexpected expenses like medical bills or car repairs?
What is the best way to start paying off debt?
What is using either the debt avalanche or debt snowball method?
What is a debt-to-income ratio?
What is the ratio of your monthly debt payments to your gross monthly income?
What is inflation?
What is the rate at which the general level of prices for goods and services rises and erodes purchasing power?
What is the difference between a pension and a 401(k)?
What is a pension is a guaranteed payment by an employer, while a 401(k) is a retirement plan that depends on contributions and investment growth?