key Term
Debt
money owed to another person or company
Paycheck to Paycheck
an expression used to describe a person or household whose monthly income is devoted to expenses and has little to no savings
Asset
anything that is owned by an individual, including money in the bank or investments
After World War I, the demand for products increased, and people began getting credit without loan sharks. Because of this, credit…
started to become more socially acceptable
To gain an understanding of your personal finances, you should know . . .
where you stand financially, how much income you have, what goals you want to set, and how you'll reach those goals.
Personal Finance
all the financial decisions an individual or family must make in order to earn, budget, save, spend, and give money over time
Credit
the granting of a loan and the creation of debt; any form of deferred payment
Net Worth
the amount by which the value of a person’s assets exceeds or falls behind the value of their liabilities
Franklin D. Roosevelt passed the New Deal because of the Great Depression in the 1930s. What was the purpose of this program?
To promote economic recovery and social reform
A _______ financial goal takes up to two years to reach.
short-term
Consumer
a person or organization that uses a product or service
Negative Net Worth
the dollar value of a person’s liabilities is larger than the value of their assets
Net Income
what a person earns after payroll taxes and other deductions are taken out; often referred to as take-home pay
List the Five Foundations
500 emergency fund
Get out of debt stay out
Pay cash for car
pay cash for college
Build wealth and be generous
A _______ financial goal takes up to 5 years to reach.
medium-term
Interest
the additional cost a lender charges for borrowing their money
Liability
financial debts or obligations
Expense
the cost of goods or services; money paid out
What % is behavior and % head knowledge
80 behavior and 20 head knowledge
A _______ financial goal takes up to 10 years to reach.
long-term
Loan Shark
person or entity that charges borrowers interest rates above an established legal rate
Positive Net Worth
the dollar value of a person’s assets is greater than the dollar value of their liabilities
Financial Literacy
the knowledge and skill base necessary for people to be informed consumers and manage their finances effectively
Making the right choices with your money—managing your money—involves knowing how . . .
earning, budgeting, saving, spending, and giving affect your money
In 1972, what association made borrowing money to attend college much easier than it had been?
the student loan marketing association (SLMA)