Budgeting
what is a budget
a way to manage your money. Manage your required expenses with your discretionary funds
What is an opportunity cost?
You have to give up an opportunity in order to take advantage of another one.
What is an investment?
giving money to someone or something with the intention of making money in return.
What is insurance?
A contract that outlines coverage plans and protects a person against financial loss or damage
What is someone's annual net income
their annual income before taxes are deducted
What is a savings account?
a place to put your money that is specifically reserved for money that is being saved.
What is a principal
Money originally Invested
Money paid out of pocket before insurance covers the remaining cost
What is someone's gross annual income?
Someone's income after taxes are deducted
What is interest?
a percentage of money earned or paid for the use of money
What is risk?
the possibility of financial loss or harm
What is the differences between home insurance and car insurance
home = Designed to offer liability protection and property coverage for theft and fire.
car = Offers protection for cars and drivers.
Give three examples of common expenditures.
groceries, rent, utilities
Interest earned on interest over time. a way to make 2x as much money quicker
what is a mutual fund
multiple stocks and bonds of multiple corporations
What is the difference between pet and travel insurance?
pet = Covers accident or illness care for pets
travel = Refunds the cost of travel in the event of cancellation; may also cover medical expenses while traveling.
Explain the difference between a fixed and variable expense
fixed = same all the time
variable = it changes based on how much/little you use it
What is inflation and how could it affect your savings?
money decreases in value over time therefore things could cost more as time goes on so it will affect your savings because you need to save more than expected in order to have enough later.
Name two financial institutions
chase, wells fargo
What is the difference between health and life insurance?
health = Pays for medical bills and prescriptions.
life = Pays a benefit to survivors in the case of death