Budgeting Basic
a plan for saving and spending your money
what is a budget?
Electronic version of a check
Debit card
Also known as a Traditional loan, which means you pay a fixed amount for a set period of time. (home purchase or car purchase)
Amortization loan
The total amount of your money earned before deductions
Gross pay
The most basic way to invest in a company
stocks
Extra payment usually based on performance or meeting certain production or sales requirements
What is a Bonus?
Confirmation bias
people tend to be more confident in their own abilities
Overconfidence
The 3 digit number lenders use to measure your creditworthiness
FICO score
Costs that remain the same each month and in frequency
Fixed Expense
Investor lends money to a government or corporation
Bond
The minimum amount an employer can pay an employee
Setting money aside for future use
Saving
Interest that earns interest
debit or credit card that requires the lender to deposit the full amount of credit line before receiving the card
Secured debit card
Taken out of a paycheck for the government
taxes
Spreading your investments to reduce financial risk
Diversification
Working more than 40 hours in one week
What is Overtime?
Money spent on goods and services
Expense
Money that you pay to the lender for borrowing money
Interest
Money owed to someone else or a corporation
Debt
Expenses that change in cost and frequency
Variable expense
Something of value that you own
Asset
When expenses exceed income
What is a Deficit?
Putting more value of things you already own
Endowment effect
Regarding losses as considerably more important than gains comparable magnitude
Loss Aversion
What is a variable expense
feeling anxiety/fear that an exciting or interesting event may currently be happening elsewhere, often by posts seen on social media
Fear of missing out (FOMO)
a debt or obligation that a company or person owes to another party
Liability
Earning income from a business that you operate yourself
What is Self-Employed?
money left over after all your expenses have been paid
What is Surplus?
protection of all assets up to at least $250,000 in case the bank fails
Savings ratio applied over a specific time period
What is a Targeted Savings Rate?
all sources of money obtained by individuals and households
What is Income?
Payment for work for a set period of time
What is salary?
An administrative worker who does not generally receive overtime is likely paid
What is a Salary?
What is wage?
What is Savings ratio?
When your employer takes money automatically from your paycheck and contribute it directly to a retirement savings plan or other savings account
One form of income
What is Earnings?
Payment based on the sale of a product or service
What is Commission?
Passed by Congress to set minimum wage and child labor laws
What is the Fair Labor Standards Act?
ability to convert an asset into cash quickly
a transaction account at a bank for daily deposits and withdrawals
What is a checking account?
Agencies like Equifax, TransUnion, and Experian
What is credit bureau?
Annual Percentage Rate. The annual cost of expressed as a percentage
What is APR?
The time allowed to pay a balance in full before interest starts to add up or accrue.
What is Grace Period?
Your name signed on the back of the check
What is a Blank Endorsement?
Protects against unfair billing and gives the right to dispute unauthorized charges
What is FCBA? Fair Credit Billing act
A credit check triggered by an application for new credit that impacts your credit score
What is Hard Inquiry?
What is revolving credit?
An asset like a car or house that secures a loan and can be seized upon default
What is Collateral?
Regulates how credit bureaus use your info and your rights to dispute errors.
What is FCRA? Fair Credit Reporting Act?
Prepaid check purchased from a bank, credit union, or convenience grocery store
What is Money Order?
Writing a check for a larger amount than you have in the bank
What is Bouncing a check?
The fee charged when you bounce a check
What is an Overdraft Fee?
Nationwide network of banks, credit unions, and other institutions that send each other credit and debit transfers
What is ACH? Automated Clearing House?
Court order that makes the borrower's employer pay a portion of the borrowers wages directly to a creditor
What is Wage Garnishment?
Occurs when someone else uses your personal information, like your name and social to obtain credit.
What is Identity theft?
The maximum amount you can borrow
What is a credit Limit?