BUDGETING
What is the 50/30/20 budget rule?
It is a guideline that suggests allocating 50% of income to needs, 30% to wants, and 20% to savings.
This type of car insurance is required by law in most states and covers damage you cause to others.
Liability Coverage
This type of account is used for everyday spending and comes with checks and a debit card.
Checking Account
What are stocks?
Stocks represent ownership shares in a company.
This form is filled out when you start a new job and tells your employer how much to withhold from your paycheck for taxes.
W4
What is a budget?
A budget is a plan that outlines expected income and expenses over a certain period.
This type of car insurance helps pay for damage to your car from events like theft, fire, or natural disasters.
Comprehensive Coverage
This type of account earns interest and is typically used to store money for future goals.
Savings Account
What are blue chip stocks?
Blue chip stocks are shares in large, well-established companies known for their reliability and stable earnings.
This form is sent to you by your employer after the end of the year and shows how much you earned and how much was withheld.
W2
How can budgeting help you achieve financial goals?
Budgeting helps you track spending, save for goals, and avoid debt.
This amount is what you pay out of pocket before your insurance starts covering expenses.
Deductible
This is the extra money the bank pays you for keeping your money in a savings or investment account.
Interest
What are penny stocks?
Penny stocks are low-priced shares of small companies, often trading for less than $5.
This form is used to report income earned as an independent contractor or freelancer.
1099
What is net income?
Net income is the amount of money you take home after taxes and deductions.
This type of account lets you set aside pre-tax money for medical expenses, but the funds typically expire at the end of the year.
Flexible Spending Account (FSA)
This type of account requires you to keep your money locked in for a set period of time in exchange for a higher interest rate.
Certificate of Deposit (CD)
What are dividends?
Dividends are payments made by a corporation to its shareholders, usually from profits.
This is the main tax return form individuals file with the IRS to report income, deductions, and tax owed or refunded.
1040
What are common deductions found on a paystub?
Common deductions include federal taxes, state taxes, Social Security, and health insurance premiums.
This is a monthly amount you pay to have health insurance, even if you don't use it.
Premium
This account acts like a mix between a checking and savings account, usually requiring a higher minimum balance but offering better interest rates.
Money Market Account (MMA)
What is compound interest?
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods.
These are people (often children) you support financially and can claim on your tax return to reduce your tax bill.
Dependents