Budgeting Basics
What is budgeting?
This is the process of creating a plan to spend your money, tracking your income and expenses.
What is your credit limit?
The maximum amount of credit you are allowed to borrow on a credit card or line of credit.
What is an account fee?
A fee charged by a bank or financial institution for maintaining an account.
What is 59½?
The age at which you can begin withdrawing from retirement accounts like a 401(k) without penalties.
What is 59½?
The age at which individuals can start withdrawing from retirement accounts like a 401(k) without penalties.
What are variable expenses?
This type of expense changes from month to month, like utilities or groceries.
What is your credit utilization ratio?
The percentage of your available credit that you are currently using.
What is leveraging?
Using borrowed money to increase the potential return on investment.
What is a 401(k)?
A tax-advantaged retirement account offered by employers, often with a company match.
What is a 401(k)?
This tax-advantaged retirement account is offered by employers and can include a company match.
What is the envelope system?
A budgeting method where cash is divided into envelopes designated for different spending categories.
What is an installment loan?
A loan that is paid back in fixed installments, such as a car loan or mortgage.
What is the interest rate?
The percentage charged for borrowing money or the amount earned on invested funds.
What is a Health Savings Account (HSA)?
A tax-advantaged savings account used for medical expenses.
What is a Health Savings Account (HSA)?
A type of account that allows individuals to save for medical expenses tax-free.
What is a fixed expense?
Expenses that remain the same each month, such as rent or mortgage payments.
What is the difference between secured and unsecured debt?
Secured debt is backed by collateral (e.g., a mortgage), while unsecured debt is not (e.g., credit card debt).
What is equity?
The value of ownership in an asset, such as the value of your home minus the mortgage.
What is an IRA?
An Individual Retirement Account, a tax-advantaged savings account for retirement.
What is gross income?
This is the total amount of money earned before any taxes or deductions are taken out.
What is a sinking fund?
A savings fund set aside for a specific future expense, such as a new car or home repair.
What is bankruptcy?
A legal process for individuals or businesses that are unable to repay their outstanding debts.
Who is MCH Financial Capability Program Coordinator?
Marady
What is a Roth IRA?
A type of IRA where contributions are made with after-tax dollars, and withdrawals are tax-free in retirement.
This tax is levied on earned income, like salaries, wages, and tips.