Budgeting 101
This costly measure is the value of the next best option when making a choice about how to allocate resources
This type of tax comes from the money you make from a job and does not fund specific programs like Social Security and Medicare.
Income tax
This adrenaline junkie term describes any uncertainty with respect to investments that has the potential to negatively affect financial welfare
risk
Principal & Interest
the act of allocating resources, usually money, with the expectation of generating an income or profit
Investment
This represents all the combinations of goods and services that a consumer may purchase given current prices within his or her given income
Budget Constraint
The U.S. has this type of tax system where high-income earners pay more of their income than those in lower brackets
Progressive tax system
This aquatic term is used to describe how easily an investment can be sold/purchased for cash.
Liquidity
This describes the maximum amount a person is approved to borrow
Credit limit
This tax form is used to communicate the exemptions you want which determines how much money is taken from your paycheck each month
W-4
Name three benefits of budgeting
This can reduce the amount of your income before you calculate the tax you owe.
Tax deducation
The _______ the investment the higher the potential_______
The riskier the investment, the higher the potential reward.
Name one way a person could establish good credit
Paying off credit card balance in full each month, not making late payments etc.
This tax form is filled out by your employer that outlines the income you earned and the taxes you paid for the year (arrives in January)
W-2
Jane is trying to choose between going to community college and a four-year university. She ends up choosing community college. What is the opportunity cost of her decision?
Attending the four-year university.
This can reduce the final amount you owe for taxes. Common qualifiers are having children, driving clean-air vehicles, and paying for higher education.
Tax credit
This brag-worthy retirement that allows employees to receive a tax break is set up and managed by employers.
401K
Character, capacity, and this term to describe backup repayment methods are what a lender uses for determining the risk of a loan.
Collateral
Give an example of a type of loan that has a long term
Mortgage
What is the median gross income for the average college graduate?
$50,000
The IRS processes 240.2 million of these forms filled out every spring that is used to calculate tax returns
1040 Form
When investing purchasing common stock, investors receive this equity-based reward.
Voting rights in shareholder meetings
What is the difference between a fixed-rate loan and an adjustable-rate loan?
Fixed rate= interest rate does not change (low risk, provides protection from sudden changes in the market)
Adjustable rate=interest rate that may change periodically depending on changes in the market (cheaper in the early years)
When would it be best to consider a single payment loan
When the loan you require is relatively small