Budgeting
With $1,000 monthly income using the 50/20/30 rule, this amount goes to needs
500
The main reason people invest instead of saving
higher potential returns
Allows you to transfer money to pay expenses and for other business activities
Payment service
a government levy (tax) imposed on individuals or entities (taxpayers) that varies with the income or profits (taxable income) of the taxpayer.
Income Tax
True or False: You need a credit card to have credit.
False
Isaiah's gross pay was $3,000 and his take-home pay was $2,500. The $2,500 is called this
Net pay
If inflation is 4% and your savings earns 1%, this happens to your purchasing power
It decreases
Which of the following instruments is NOT typically associated with spending? 1.Cash 2.Credit card 3.Debit card 4.Certificate of deposit
Certificate of deposit
What is the income before taxes
Gross Income
Finance a specific purchase for a specific amount of time. Regular monthly payments made to the interest first, then the principal
Installments
Earning $40,000 per year and saving 20%, it takes this long to save $16,000
2 years
What is net worth and how do you find it (what is the equation)
Items of Value- Amounts owed= Net worth (your wealth)
What is a current liability
debts that must be paid within a short time, usually less than a year.
What form do you need to file your taxes and when is the deadline if you owe?
Form 1040/ April 15
What are some disadvantages of credit cards? Name at least 2.
1. Temptation to overspend 2. Failure to repay may result in loss of income, valuable property, your good reputation, and/or lead to bankruptcy 3. Ties up future income 4. More costly over time
50/30/20 is labeled as ___ and 20 help plans for what?
Common saving rule and 20 help plan for unexpected expenses
A a type of security that gives you partial ownership in a company.
Stock
What are the two things you pay when you first move to a new apartment (renting)
Security Deposit and First month rent
What are the two things that can affect your filing status?
Martial status and dependents
A credit score is a three-digit number, typically between ___ and ____, that predicts how likely you are to pay back debts on time
300 and 850
What is the different between APR and APY? Why do they matter?
One is yield, and the other is rate. Rate is what you pay on loans and credit, while yield is the money you earn from your savings and investments. The higher the yield, the better because your money grows faster over time.
Accumulation of money
In the 'Pay Yourself First' method, you should do this before paying bills
transfer money to savings
These two governments have the ability to choose the amount of sales tax charged
State and local government
Name the 5 C's of Credit
Capacity , Character, Capital, Collateral, Conditions