BUDGETING BASICS
This type of budget divides your income into categories like savings, necessities, and wants.
What is the 50/30/20 rule?
This investment allows you to own a share of a company.
What is a stock?
This three-digit number helps lenders assess your creditworthiness.
What is your credit score?
This account is typically used for short-term savings and offers easy access to your funds.
What is a savings account?
This type of retirement account allows your money to grow tax-free if certain conditions are met.
What is a Roth IRA?
The term for keeping track of all your expenses, so you know where your money goes each month.
What is a spending tracker?
A bond is essentially a loan that you make to a company or government, and in return, you earn this.
What is interest?
If you don’t make your credit card payments on time, this will likely occur.
What is a late fee?
The rule of thumb suggests setting aside this many months’ worth of expenses for emergencies.
What is 3-6 months?
This plan allows employees to set aside a percentage of their paycheck before taxes for retirement.
What is a 401(k)?
These are fixed costs you pay regularly, like rent or a mortgage.
What are fixed expenses?
This investment strategy involves spreading your money across different types of assets to reduce risk.
What is diversification?
The process of borrowing money and then paying it back with interest is known as...
What is taking out a loan?
This type of savings account is often used for long-term goals like buying a home or paying for education.
What is a CD (Certificate of Deposit)?
A pension plan that guarantees a specific payout after retirement is a type of this.
What is a defined benefit plan?
A method where you allocate a certain percentage of your income to each expense category.
What is the envelope system?
This type of retirement account allows you to invest tax-deferred.
What is a 401(k)?
A loan used to buy a house is called a...
What is a mortgage?
This kind of automatic transfer helps you save without thinking about it.
What is automatic savings?
This is the age at which you can begin receiving Social Security retirement benefits, though it can be delayed for increased payouts.
What is 62?
The first step in building a budget is understanding how much you earn. This process is called...
What is income assessment?
The risk of losing money on an investment due to market fluctuations is called...
What is market risk?
This type of debt has higher interest rates than most, often associated with credit cards and payday loans.
What is high-interest debt?
This is the practice of saving a portion of every paycheck, often without fail, to ensure long-term financial health.
What is paying yourself first?
This is the process of estimating how much money you’ll need in retirement and planning how to reach that amount.
What is retirement planning?