Personal Income
Money you receive for working, such as wages or salary
What is earned income?
Borrowing money from the bank to buy a house is called this.
What is a mortgage?
A safe place to store money that also earns a small amount of interest.
What is a savings account?
The system where employers deduct tax directly from wages and salaries.
What is PAYE?
A financial plan that tracks income and expenses
What is a budget?
Income from investments such as interest, dividends, or rent
What is unearned income?
This three-digit number shows how reliable you are at paying back borrowed money.
What is a credit score?
Investing in these makes you a part-owner of a company
What are shares?
Tax deducted by banks on interest you earn from savings
What is RWT? (Resident Witholding Tax)
This type of expense stays the same each month, like rent or insurance
What is a fixed expense?
The amount of money you take home after deductions
What is net or take-home pay?
When you only pay the minimum on a credit card, you end up paying more because of this.
What is interest?
This government scheme helps New Zealanders save for retirement.
What is a Kiwisaver
This type of tax is paid by self-employed people and businesses in advance during the year.
What is provisional tax?
Money set aside for unexpected events like car repairs or medical bills.
What is an emergency fund?
This type of income is irregular and can include bonuses, commissions, or freelance work.
What is variable income?
This type of loan provider charges very high interest rates and can trap people in debt cycles.
What is a loan shark?
A concept that allows you to earn more in interest by earning interest on interest
What is Compound Interest?
The government department in New Zealand responsible for collecting taxes
What is IRD? (Inland Revenue Department)
When your expenses are greater than your income, you have this type of budget.
What is a deficit budget?
This is the total of all income received, before taxes or deductions are applied.
What is gross income?
Failing to make payments on a loan or credit agreement is called this, and it can lead to legal action by creditors.
What is defaulting?
When you spread your money across different investments to reduce risk, it’s called this.
What is Diversification?
This principle of taxation means people with higher incomes pay a larger percentage of their income in tax
What is progressive taxation?
When you earn enough income to cover all your expenses and still have some income leftover
What is a surplus?