Intro to Money
Something we use to buy things we need or want
Money
Process of creating a plan to manage your money
Budgeting
Price is a function of the intersection of:
Supply and demand
Ability to borrow money or access goods and services with the understanding that you will pay back the borrowed amount in the future
Financial arrangement where an individual pays for protection against a specific type of loss
Insurance
Concept of money being saved and used later
Store of Value
Things essential for survival and basic well being
Needs
A vendor providing a discount on goods or services
Sales and promotions
2 benefits of credit
Access to funds, Convenience, Financial flexibility, Investment opportunities
Person who receives pay out from an insurance policy
Beneficiary
Occurred around 600BC in Lydia (now part of Turkey)
First coins made
Things you desire but which are not essential, make life more enjoyable or comfortable
Wants
When you buy a larger amount of a good, prices will be
lower
2 negatives of credit
Interest cost, Debt accumulation, Financial stress, Risk of bankruptcy
Amount you must pay out of pocket before insurance kicks in
Deductible
A system used before money where people traded goods and services directly
Barter system
3 major categories of household expenses
- Home, Food, Transportation, Health and wellness, Entertainment, Education
Available at lower prices because of cost saved by supplier on marketing
Generic/non-name brad
Something of value that a borrower offers to a lender as a guarantee for a loan
Collateral
3 most common types of insurance
Auto, Homeowners, Health, Life
Property of money that enables trading items directly in an efficient manner
Medium of Exchange
Budgeting rule of thumb: For needs/wants/savings
50%/30%/20%
Asking for or insisting on a lower price
Negotiating
A number that reperesents how trustworthy you are when it comes to borrowing money
Credit score
Mr. Lynch advises to only ensure against this type of financial loss
Catastrophic