Intro to Personal Finance
A fee paid by a borrower to the lender for the use of borrowed money
What is interest?
Saving money over time for a large purchase
What is a sinking fund?
The act of matching your bank statement with your checkbook
What is reconcile?
A measure of an individual’s credit risk; calculated from a credit report using a standardized formula
What is a credit score?
Completed annually by current and prospective college students to determine their eligibility for financial aid
What is the Free Application for Federal Student Aid (FAFSA)?
A system by which goods and services are produced and distributed
What is economy?
Interest paid on interest previously earned
What is compound interest?
An item that is bought without previous planning or consideration of the long-term effects
What is an impulse buy/purchase?
Cost of borrowing money on an annual basis; takes into account the interest rate and other related fees on a loan
What is Annual Percentage Rate (APR)?
Program that allows students to work part time while continuing their studies
What is work study?
Not having an emergency fund, not keeping a written monthly budget, and failing to plan for retirement
What are common money mistakes that Americans often make?
A fully-funded emergency fund at your age
What is $500?
Fixed expenses, variable expenses, and discretionary expenses
What are things your monthly budget should include?
Something that cannot be done with a debit card but can be done with a credit card
What is go into debt?
Total estimated student loan debt outstanding (unpaid) for the U.S.
What is $1 trillion
Understanding this is important when it comes to developing a money plan that’s right is right for you
What is your money personality/strengths/weaknesses?
Large purchases, emergency fund, and wealth building
What are three basic reasons for saving money?
Overdraft fee from bank, bounced check fee from the store, stress from money mismanagement
What are consequences of overdrawing your checking account?
Use a paper shredder, create strong passwords, check credit report annually, never give out SS number unless absolutely necessary
What are ways to protect your personal information?
Ten years or more of payments, limited choices and possibilities, default
What are reasons you should avoid student loans?
When it comes to managing money, success is about ___% head knowledge and ___% behavior
What is 20 and 80?
Save $500 in an emergency fund
What is the First Foundation?
Gives every dollar a name on paper, on purpose, before the month begins; income minus outgo equals exactly zero
What is a zero-based budget?
Method by which debts are organized from smallest to largest balance; minimum payments are made to all debts except for the smallest, which us attacked with the largest possible payments
What is debt snowball?
Find a mentor, read books, surround yourself with people who have similar goals and ambitions as you
What are ways you can invest in yourself?