Budgeting
Your income AFTER tax deductions, and what you should use to determine your budget.
What is net income
This number is used by lenders to determine how much they charge you for interest on loans.
What is a Credit Score
True or False: Buying concert tickets when they go on sale counts as a valid financial emergency
This is an investing technique in which you spread your money around different types of investments
What is diversification
Waiting until your 30s or 40s to start investing means missing out on the massive wealth-building power of this concept, where your earnings generate their own earnings.
What is compound interest
Expenses that stay the same month to month (like rent). This is not an easy area to cut down spending
What are fixed expenses
What is the range a credit score can fall within?
What is 300-850
Why should your emergency fund be kept completely separate from your checking account?
To avoid spending it on everyday purchases
This investment is a share of ownership in a corporation
What is a stock
While buying a reliable used car makes sense, purchasing a brand new luxury vehicle right out of college is a classic trap because of this rapid value loss.
What is depreciation
Expenses that change month to month and are the easiest places to cut back spending.
What are variable/discretionary expenses
This term refers to the percentage of your total available credit that you are currently using
What is credit utilization ratio
Financial experts generally recommend having this many months' worth of living expenses in a savings account.
What is 3-6 months
This employer-sponsored retirement account often comes with a "match" and should be taken advantage of
What is a 401(k) or 403(b)
The rise in popularity of these is draining the accounts of young adults without them realizing the cost
What are subscriptions/delivery services (doordash, gym membership, streaming services)
This type of savings account usually offers a higher interest rate than a traditional big-bank savings account.
What is a High-Yield Savings Account/ Money Market/ CD
What is 30 days
What are some reasons everyone should have an emergency savings account?
What is unexpected job loss, medical bills, car repairs, home/apt emergencies.
This type of individual retirement account allows you to invest money you've already paid taxes on, meaning your future withdrawals are completely tax-free
What is a Roth IRA
This happens when companies trick consumers into signing up for recurring payments through hidden terms, deceptive free trials, and more
What are subscription traps
The rule of thumb for budgeting suggests splitting your income into __% needs, __% wants, and __% for savings.
What is 50-30-20 rule
Property that is used by a lender to secure a loan (the bank takes the property if you don't repay the loan).
This special type of savings account offers a significantly higher Annual Percentage Yield than a traditional savings account.
What is a High-Yield Savings Account
This investment pools money from many individual investors to purchase a diversified portfolio of stocks, bonds, or other securities
What is a mutual fund
This financial phenomenon happens when your income increases, but instead of saving the extra cash, you immediately upgrade your lifestyle and spending
What is lifestyle inflation