Money Basics
What is interest?
A extra amount of money that is added to the money you borrow.
What is a need?
Something you must absolutely have in order to live
what is investing?
Placing your money into a company with the goal of making a profit over time.
What is debt?
When you borrow money and have to pay it back, it’s called this.
what is an expense?
This is money you spend.
What is money?
A title for the coins and bills we use to buy things
What is saving?
Saving is money that you put aside and don't spend right away.
What is investing?
buying part of a company through the stock market
what is a credit card?
This type of card lets you borrow money and pay it back later.
what is income?
This is the total money you earn before
What is a bank account?
safe place to keep your money and access it when you need it.
What is a want?
something you don't need to survive but want just for enjoyment
What is a retirement account?
A type of bank account used to save money for retirement by investing it
What’s the difference between a checking and a savings account?
Checking is for daily spending; savings is for storing money and earning interest.
Why do people put their money in a bank account?
It's safer and earns interest.
What is a debit card?
What is budgeting?
a smart way to keep track of your money by writing down how much you earn and how much you spend.
What is a loss?
when your investment loses value
What is a credit limit?
a maximum amount of money you can borrow on a credit card
what is a surplus?
when you have more income than expenses
How can compound interest help your money grow faster than simple interest?
With compound interest, you earn interest on your interest — it builds faster over time.
define the 50/30/20 rule
50% of your paycheck goes towards needs, 30% towards wants, and 20% for savings
Why is it important to set financial goals?
Goals help you plan and stay motivated to save.
What does "interest" mean?
Interest is the extra money the bank pays you for keeping your money there (or that you pay when you borrow)
What happens if you don’t pay your credit card bill?
You get charged interest and your credit score goes down.