Vocabulary - Module 3
The act of setting aside money for future use instead of spending it; this financial practice forms the foundation for your financial plans because it provides you with options for what to do with your money
Saving
A secret 4-digit number that you create when you receive a new debit card; this serves as a security feature to prevent others from using your card
Personal Identification Number (PIN)
Complete the quote:
"A penny saved is a penny ______."
earned
What is the financial term that refers to people that don't use banks?
Unbanked
Money that a person, organization, or government owes to another person, organization, or government
Debt
A specific amount of money you save to cover your living expenses once you stop working at the end of your career
Retirement Savings
Specific things you can do with the money in your bank account, including: taking money out (withdrawals), putting money in (deposits), borrowing money (loans or credit), and moving money to other accounts (transfers)
Bank Transactions
What financial term describes the act of purchasing items that are not essential as a way to cope with emotions?
Emotional Spending
Name one essential requirement upon opening a bank account.
Government Issued Photo ID
Social Security Number
Physical Address
Initial Deposit
Money borrowed from a lender (typically a financial institution) that is to be paid back over time, usually with interest
Loan
Spending triggers are specific ______, ________, or ________ that can arise and influence a person to make poor spending and saving decisions
Events, emotions, or patterns
An organization whose services focus on enabling financial transactions between people, corporations, or governments
Financial Institution
What are the three main challenges that make saving money difficult?
1. Personal Habits
2. External Influences
3. Lack of Goals
What does the acronym ATM stands for?
Automated Teller Machine
An initial amount of money that you pay toward a major purchase, such as a home or a car; the rest of the purchase price is covered by a loan which you pay back over time
Down Payment
An option that many employers offer which allows employees to direct a portion of each paycheck directly into their savings or retirement account
Automatic Savings Program
A rule that financial institutions set for their account holders where the account owner needs to keep a certain amount of money in their account at all times—otherwise, they will be charged a fee
Minimum Balance Requirement
Emma frequently watches popular YouTubers who showcase trendy fashion and the newest tech gadgets. Seeing their luxurious lifestyle makes her feel pressured to keep up, leading her to spend her money on similar items instead of saving. This is an example of which type of savings obstacle?
External Influences
A special type of savings account where you deposit money for a certain, predetermined amount of time; while it's in this account, you cannot access your money—but you receive interest payments in exchange
Certificate of Deposit
Name one warning sign that someone may be struggling with debt.
Answers may vary.
Spending more money than you earn
Missed payments
Relying on credit cards for everyday expenses
the Money Buckets Method is a useful framework for strategizing how you will spend and save your money by devoting certain portions of your income to different categories. What were the 4 major money buckets involved in the money buckets game?
Required Living Expenses
Emergency Fund
Major Life Expenditures
Retirement Fund
A payment that someone must make to their bank if they accidentally try to withdraw more money than they have in their account—which is called having non-sufficient funds
Overdraft Fee
According to the 50/30/20 Rule, what percentage of income should be allocated to needs, wants, and savings?
50% for Needs
30% for Wants
20% for Savings
Name the two essential informations required to process transfers and differentiate them.
1. Account Number -An 8-12 digit number that is used to identify a specific checking or savings account
2. Routing Number - An 8-12 digit number that identifies which banking institution created a specific account
What is one strategy to avoid debt problems?
Answers may vary.
- Debt consolidation
- Loan Refinancing
- Deferment
- Credit Counseling
- Negotiating with Creditors