Paychecks and Taxes
This is your pay before taxes and deductions come out
What is gross pay
This type of fee is charged by a bank when you withdraw more money than you have in your account.
Overdraft Fee
This type of investment involves lending money to a government or corporation in exchange for regular interest payments and the return of the principal at maturity.
BOND
This type of expense is predictable and stays the same amount every month, like rent or a car payment.
fixed expense
The initial amount of money you borrow when taking a loan
The principal
This type of interest is calculated on both the initial deposit and any interest that has already been added to your account.
Compound interest
This type of investment represents ownership in a company, allowing investors to share in the company's profits through dividends and capital appreciation.
Stock
This rule suggests saving at least 20% of your income for savings and investments.
50/30/20 rule
This is a legal agreement that helps cover the costs if something unexpected happens, such as an accident or illness.
insurance
This form is provided by your employer at the end of the year and details how much you earned and how much tax was withheld from your paycheck.
W2 Form
Financial experts recommend setting aside this amount worth of living expenses, for unexpected emergencies in your Emergency Fund
3-6 Months
The Rule of 72 is used to estimate the number of years it will take for an investment to double based on this factor.
What is interest rate?
This type of insurance helps cover the cost of damage to your car, and is often required by law.
Auto Insurance
This number, ranging from 300 to 850, is used by lenders to assess your creditworthiness and can impact your ability to get loans, credit cards, or even a job.
Credit Score
This document shows your pay, deductions, and net pay for a specific pay period.
What is a pay stub
This type of financial institution is member-owned and often offers higher interest rates on savings accounts and lower rates on loans than a commercial bank.
Credit Union
This type of account is designed for long-term retirement savings and offers tax advantages and employers will sometimes match a percentage of your contributions
401k
This economic term describes the general increase in prices and the decline in purchasing power over time.
inflation
This is the process of borrowing money and paying it back with interest, commonly used for purchases like homes, cars, or education.
taking out a loan
This form is used by employees to determine how much federal income tax should be withheld from their paycheck
What is W-4 Form
This type of savings account requires you to lock in your money for a specific period of time, and in return, you receive a higher interest rate than a regular savings account.
Certificate of Deposit
Sarah is closer to retirement and looking for an investment that will provide steady, reliable returns with minimal risk to her principal. What is her risk level?
Conservative
This is the practice of paying off debt with the highest interest rates first, to save money over time.
debt avalanche method or high rate method
This is the government form used by employees to report their income and calculate the taxes owed for the year.
1040 Form