Income
The amount of money you receive on your paycheck before taxes and deductions are taken out.
Gross Pay
In general, how much should you keep in an emergency fund?
6 months salary
The first amount you pay when you purchase something big like a home/condo/townhome or vehicle
Down Payment
A good credit score is _______ or higher
600
The Formula that you would use to calculate how much time it would take you to double your savings account at a certain interest rate
The Rule of 72
Paperwork that you receive by Jan 31st each year that tells you how much income you earned.
W-2
An estimate of income and expenses for a given period of time.
Budget
The amount you pay before your insurance company covers the rest of the bill.
Deductible
When you cannot pay your debts and the government forgives some of it for you. Stays on your credit report for 10 years, drastically lowers your credit score
Bankruptcy
FDIC Insurance protects your money up to what amount?
250,000
The amount of money earned after taxes, retirement, and insurance deductions are taken out.
Net Pay
An expense that must be paid each month but the cost of it may change month to month, such as many utilities, credit card bills
Variable Expense
The amount you pay for insurance coverage.
Premiums
Disadvantages of having bad credit
Higher Interest on Loans
Difficulty borrowing money
A banking service that will cover a purchase if it exceeds the amount of money that you have in your account.
Overdraft Protection
This is a form that you fill out when you are first hired. It tells your employer how much money you want withheld from your paycheck.
W-4
A type of financial institution, for profit, higher interest rates on loans, lower on savings accounts.
Bank
Part of the mortgage payment that includes property taxes and insurance costs.
Escrow
This is when people lend you money but charge really high interest rates and fees that aren’t fair. This is when lenders try to take advantage of borrowers.
Predatory Lending
Financial Institution that operates on a not for profit basis.
Credit Union
What you give up when you make a choice.
Opportunity Cost
What percentage of your paycheck should you try to save each month?
20%
The 50/30/20 Rule.
When the interest rate you pay for the loan on your home does not change, making your payment the same each month of the loan.
Fixed Rate Mortgage
Name 1 factor that can negatively impact your credit score.
Paying bills late, Applying for too many loans, bankruptcy, Debt to income ratio, etc..
A disadvantage of not having a bank account.
Earning Interest (The time value of money)
Theft/Loss