Banking & Money
The central bank of the United States, responsible for regulating the money supply and setting interest rates.
What is the Federal Reserve (The Fed)?
A three-digit number between 300 and 850 that represents your creditworthiness to lenders.
What is a credit score?
The form you fill out when you start a new job that tells your employer how much money to withhold from your paycheck for taxes.
What is a W-4
The strategy of spreading your investments around among different asset classes to reduce risk ("not putting all your eggs in one basket").
What is diversification
The regular monthly or annual payment you make to keep an insurance policy active.
What is a premium
A non-profit, cooperative financial institution that is owned by its members.
What is a Credit Union?
The cost of borrowing money on a yearly basis, expressed as a percentage
What is the APR (Annual Percentage Rate)
The standard deadline date for filing your federal and state income tax returns each year.
What is April 15th
Earning interest not only on your original principal, but also on the interest that has already accumulated.
What is compound interest
The out-of-pocket amount you must pay before your insurance company starts to pay for a claim.
What is a deductible
The federal agency that insures your bank deposits up to $250,000 per account.
What is the FDIC (Federal Deposit Insurance Corporation)
If you only pay this amount on your credit card bill every month, it will take the longest time to pay off your balance and cost you the most in interest.
What is the minimum payment
The acronym for the payroll tax that funds Social Security and Medicare
What is FICA (Federal Insurance Contributions Act)
A mathematical method used to estimate how many years it will take for an investment to double in value at a given interest rate
What is the Rule of 72
The person you designate to receive the financial payout from your life insurance policy in the event of your passing
What is a beneficiary
The term for writing a check for more money than you currently have in your checking account.
What is an overdraft (or bouncing a check)
A loan backed by collateral, such as a car loan or a mortgage.
What is a secured loan
The form you receive from your employer in January that summarizes your total earnings and taxes withheld for the previous year.
What is a W-2
An investment vehicle where a professional manager pools the money of many investors to buy a diverse portfolio of stocks or bonds.
What is a mutual fund
If you are at fault in a car accident, this specific type of auto insurance coverage pays for the damage to the other person's car and property
What is liability insurance
Because of inflation and the potential to earn interest, this economic principle states that a dollar today is worth more than a dollar tomorrow.
What is the Time Value of Money
A legal process to get out of debt when you can no longer make required payments. It severely damages your credit score and stays on your report for 7 to 10 years.
What is bankruptcy
The amount of money you actually take home on your paycheck after all taxes and deductions have been subtracted from your gross pay.
What is net income (or net pay)
An employer-sponsored retirement savings plan where workers can contribute pre-tax money, and employers often offer a matching contribution.
What is a 401(k)
A type of insurance that replaces a portion of your income if you become ill or injured and are unable to work for an extended period
What is disability insurance