Budget Basics
This financial principle encourages you to set aside a portion of your income for unexpected costs or emergencies.
What is an emergency fund?
This type of savings account typically offers higher interest rates than a regular savings account and is ideal for short-term goals.
What is a high-yield savings account?
This is the total amount of money you earn before any deductions like taxes or retirement contributions.
What is gross income?
This three-digit number represents your creditworthiness and influences your ability to borrow money.
What is a credit score?
This financial practice involves saving a portion of your income to prepare for future expenses or goals, such as retirement or education.
What is saving?
This tool can help you visualize your spending habits and set financial goals, often represented as a pie chart.
What is a budgeting app or software?
This savings method involves automatically transferring a set amount from your checking account to your savings account each month.
What is an automatic transfer?
This term refers to the regular payment made to reduce a debt, often including both principal and interest.
What is a loan payment?
This term refers to the total amount of credit available to you, including credit cards and lines of credit.
What is credit limit?
This type of insurance provides coverage for your home and personal belongings against damage or loss.
What is homeowners insurance?
This term refers to the necessary expenses that you must pay to maintain your lifestyle, such as rent and utilities.
What are fixed expenses?
This strategy suggests saving at least 20% of your income for future needs, including retirement and emergencies.
What is the 50/30/20 rule?
This term refers to the fees charged by financial institutions for managing accounts or transactions, often expressed as a percentage.
What are service fees?
This financial term refers to the fees and interest you pay when you borrow money, typically expressed as a percentage.
What is the interest rate?
This term refers to the practice of comparing prices and quality before making a purchase to ensure you’re getting the best deal.
What is shopping around?
This type of expense varies from month to month, such as groceries or entertainment.
What are variable expenses?
This strategy involves setting specific savings targets for different categories, such as travel, home repairs, or education.
What is goal-based saving?
This term describes the annual percentage rate that reflects the true cost of borrowing, including interest and fees.
What is the annual percentage rate (APR)?
This practice involves making only the minimum payment on a credit card, often resulting in high-interest charges over time.
What is minimum payment?
This term describes the potential financial return on an investment, which can be affected by market fluctuations.
What is investment risk?
This budgeting strategy involves setting aside money for specific goals, like vacations or major purchases, in separate accounts.
What is a sinking fund?
This method encourages you to save change from your everyday purchases by rounding up to the nearest dollar.
What is a round-up savings app?
This financial term indicates the likelihood that a borrower will default on a loan, affecting interest rates and creditworthiness.
What is credit risk?
This term describes the process of checking your own credit report to ensure accuracy and identify potential issues.
What is a credit report review?
This is the tax-deferred account specifically designed for retirement savings, often including employer matching contributions.
What is a 401(k)?