Defining Terms
The tendency to conform to the behaviors and beliefs of the people around you.
Herd Mentality
A person or business that provides goods and services
Producer
The price set for a good or service in the marketplace, where demand and supply are perfectly balanced
Equilibrium Price
What is the 50-30-20 rule of budgeting?
Recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings
Define each term:
Credit
Debit
Credit: Borrowed money or the ability to borrow.
- Debit: Direct withdrawal from available funds.
the tendency to put more value on things you already own
Endowment Effect
The amount of money needed to sustain a certain level of living, including basic expenses such as housing, food, taxes, and healthcare; often used when comparing how expensive it is to live in one city versus another
Cost of living
Any items subtracted from your paycheck, including state and federal income taxes, Social Security, health insurance or 401(k) contributions
Deduction
What does this acronym FAFSA mean
Free Application for Federal Student Aid
The number that determines a student's eligibility for federal student aid.
Student Aid Index (SAI)
The tendency to feel anxiety/fear that an exciting or interesting event may currently be happening elsewhere, often aroused by posts seen on social media website.
Fear Of Missing Out (FOMO)
The United States of America is a combination of ___________ and ___________ economies.
Command and market
A numerical representation of a person's creditworthiness.
Credit Score
An investing tool for individuals to earmark funds specifically for their retirement.
Individual Retirement Account (IRA)
Maintaining a good credit score by paying bills on time, keeping balances low, and avoiding excessive inquiries.
Managing Credit
Costs that have already been incurred and cannot be recovered
Sunk Costs
What amendment protects due process for property rights of an individual
5th Amendment
The smallest amount that must be paid on a credit account each month.
Minimum Payment
Earnings after all deductions (take-home pay)
Net Pay
The process of paying off a debt over time with regular payments that cover both interest and principal.
Amortization
When a person mistakenly believes they are better than others
Overplacement
What are the four rights of property owner are:
Possession
Control
Exclusion
Enjoyment
A measure of financial stability, calculated by dividing monthly debt payments by gross monthly income.
Debt-to-Income Ratio
What does each word stands for:
Taxes: 1040, W-2, and W-4 Forms
1040 Form: Individual income tax return.
- W-2 Form: Reports wages and tax withholdings.
- W-4 Form: Determines how much tax is withheld from pay
An economic system where private individuals or businesses own capital goods, and production, prices, and distribution are determined by competition in a free market rather than by state control.
Capitalist System