Budgeting
What is a budget?
A budget is a plan that outlines expected income and expenses over a specific period of time.
What is a credit score?
A credit score is a numerical representation of a person's creditworthiness.
What is a stock?
A stock is a share of ownership in a company, entitling the owner to a portion of the company's profits.
What is an emergency fund?
n emergency fund is money set aside to cover unexpected expenses, such as medical bills or car repairs.
What is income tax?
Income tax is a tax that governments impose on income generated by businesses and individuals within their jurisdiction.
What is discretionary income?
Discretionary income is the money left over after paying for essentials like rent, food, and bills.
What is a credit report?
A credit report is a detailed history of an individual's credit activity and current credit status.
What is a bond?
A bond is a fixed income instrument that represents a loan made by an investor to a borrower, typically corporate or governmental.
What is compound interest?
Compound interest is interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods.
What is a W-2 form?
A W-2 form is a tax form that reports an employee's annual wages and the amount of taxes withheld from their paycheck.
What is a fixed expense?
fixed expense is a cost that does not change from month to month, such as rent or a car payment.
What affects your credit score?
Factors that affect your credit score include payment history, amounts owed, length of credit history, credit mix, and new credit inquiries.
What is a mutual fund?
A mutual fund is an investment vehicle that pools money from many investors to purchase a diversified portfolio of stocks, bonds, or other securities.
What is a high-yield savings?
A high-yield savings account offers a higher interest rate than a regular savings account, allowing your money to grow faster.
What is a tax deduction?
A tax deduction is an expense that a taxpayer can subtract from their gross income to reduce the total taxable income.
How do you calculate net income?
Net income is calculated by subtracting total expenses from total income
How can you improve your credit?
You can improve your credit score by paying bills on time, keeping credit card balances low, and avoiding opening too many new accounts quickly.
What is diversification?
Diversification is an investment strategy that involves spreading investments across various assets to reduce risk.
How much should you save monthly? ( Rule of thumb)
A general rule of thumb is to save 20% of your income each month for future needs, including retirement and emergencies.
What is a tax credit?
A tax credit is a dollar-for-dollar reduction in the amount of taxes owed, often for specific expenses like education or energy efficiency.
What is zero-based budgeting?
Zero-based budgeting is a method where every dollar is assigned a job, and income minus expenses equals zero.
How can you improve your credit?
A hard inquiry is a check on your credit report by a lender or creditor, typically when you apply for credit, which can slightly lower your credit score.
What is a 401(k)?
A 401(k) is a retirement savings plan offered by employers that allows employees to save and invest a portion of their paycheck before taxes are taken out.
What is a certificate of deposit?
A general rule of thumb is to save 20% of your income each month for future needs, including retirement and emergencies.
What is a tax refund?
A tax refund is the money returned to a taxpayer when their total tax payments exceed their tax liability for the year.