Savings 101
A bank account to store money and earn small interest
Savings Account
Money you earn from work, jobs, or other sources
Income
A form of credit in which a bank (or other licensed lender) provides a borrower with a sum of money, which the borrower agrees to repay over time, typically with interest
Loan
A bank account used for everyday spending with a debit card
Checking Account
Money you owe.
Debt
Savings set aside for unexpected expenses
Emergency Fund
Your actual take-home pay after taxes and deductions
Net Income
Things you own that have value, like cash or a home
Assets
Money taken out of your income to pay for public services
Taxes
The cost of borrowing money or the reward for saving it
Interest
A retirement savings plan offered by many employers
401(k)
The money you make before taxes are taken out of your paycheck
Gross Income
The ability to borrow money with a promise to pay it back later
Credit
Money you spend on things you need or want. Can be fixed (same every month) or variable (changes)
Expense
The original amount of money you borrow or invest
Principal
Retirement account that grows tax-free
Roth IRA
Form you fill out when starting a job that tells your employer how much tax to withhold
W-4 Form
A three-digit number that measures your trustworthiness to pay back loans
Credit Score
Putting money into something (stocks, bonds, etc.) expecting it to grow in value over time
Investment
The percentage of your gross monthly income that goes toward debt payments
Debt-to-Income Ratio (DTI)
A savings account that offers a higher interest rate than traditional banks
High-Yield Savings Account (HYSA)
Form your employer gives you showing how much you earned and the taxes you paid
W-2 Form
The yearly cost of borrowing money
Annual Percentage Rate (APR)
Interest you earn on your main deposit plus any interest you already accumulated.
Compound Interest
The total value of what an individual or business owns minus the amount owed in debts
Networth