Interest
What are the two types of interest?
Simple and Compound
What is budgeting?
the process of calculating how much money you must earn or save during a particular period of time, and of planning how you will spend it
What is a tax?
Mandatory financial charge imposed by the government
What is gross pay?
Income before taxes are deducted
What is an asset?
What a person owns
What is simple interest?
constant rate of additional money added to the original amount, generally on loans or savings
What is 50/20/30 method?
50% to needs, 20% to savings, and 30% to wants
Which three programs receive most funding from taxes?
1. Medicare
2. Military
3. Social security
What is net pay?
Income after taxes are deducted
What is SMART goals?
Specific: Clear and detailed.
Measurable: Quantifiable.
Attainable: Realistic.
Relevant: Meets a real need.
Timebound: Has a deadline.
What is complex interest
exponentially increasing amount of money added on the original amount as the years go on
What is Envelop budgeting?
Split up total income into different envelops or groups, one for each spending area or saving
What taxes are part of FICA?
Social security and medicare
Which is a higher amount, gross or net income?
Gross income
What is 401(k)?
People allocate a certain portion of their income to save for retirement
Jeff has $1,000 which will earn interest at a rate of 1.0% per year. How much money does Jess have by the second year?
$1,010
What is zero-based budgeting?
Every single dollar is allocated somewhere - on some spending or saving
Jeff makes $1,000. He has to pay a 2% state income tax. How much money does Jeff keep?
$980
Jeff has a gross pay of $1,000. He has $200 deducted from his income. The remaining $800 is...
Net pay
What is net income equation?
Net income = revenues - expenses
Jeff has $1,000 which will earn interest at a rate of 1.0% per year. How much money does Jess have by the third year?
$1,020.10
Jeff makes $4000.00. He saves $2000, he saves $400, and he uses $600 on wants. What budgeting method is this?
50/20/30
Jeff makes $1,000. He has to pay a 2% state income tax, 8% federal income tax, and 6% for his retirement. How much money does Jeff keep?
$840
Jeff has a $400 income after $200 are deducted from his gross pay. What is his gross pay?
$600
What is the equation for net worth?
Net worth = assets - liabilities