Banking
a account at a bank mainly used for regular transactions
what is checking account
the price you pay for borrowing money
Interest
This is what the money you owe someone is called
what is debt
a preset borrowing agreement that can be used at any time, paid back, and borrowed again with a limit. It can be used for any purpose
Line of Credit
The income you have before taxes and other deductions
what is gross income
an account mainly used for storing money and has an interest rate
what is a savings account
how much you pay annually for borrowing money
a fee you get from your bank for trying to spend more money than you have in an account.
what is overdraft
a line of credit specifically for property or a house
what is a mortgage
The income you have after taxes and deductions
Net Income
card that allows you to spend money by drawing on funds you have deposited at the bank.
What is a Debit Card.
a credit card is connect to a line of credit that you borrow from.
usually a bank or credit card company opening a line of credit that you can borrow from
What is a Lender
the state of being responsible for something, especially by law. In finance its essentially debt that you are obligated to pay. For something like insurance, it means having coverage for things you would normally be responsible for covering yourself.
what is Liability
essentially a google review of how good a borrow you are to lenders
what is my credit score
based on credit history. This includes paying any bill on time, total debts, how long you’ve had credit history among other things. Credit score effects how much and if at all lenders will use determine your line of credit or applying for a loan and interest rates.
make your money work for you
what is an investment
property pledged by a borrower (you) to protect the interests of the lender. “you can borrow my horse, but I get to keep your donkey until you give my horse back”. Or maybe more modern, the bank’s lien on a car title for a car loan.
Collateral
the amount due on any debt before interest, or the amount invested before returns. This is basically the actual money that you borrowed, rather than the interest which is just the price you pay for borrowing
What is Principal
items you own that can are of monetary value such as cash,real estate, and certain personal property.
What is an asset
maximum amount you can borrow
what is Credit Limit
the value of ownership. usually applicable to a mortgage.
what is equity.
If you buy a house, but you’ve been making payments on it for 10 years, you have built up 10 years worth of equity. that money is still yours. So if you sold that house before paying it off, the equity is how much youd keep, and the rest would go towards paying off the rest of the mortgage.
Interest that you gain on your interest.
What is Compound Interest
example:
If you have $100 and it earns 5% interest. You will end the year with $105. Compound interest makes it so the second year, your interest rate itself goes up, and the second year you will end with $110.25. Not only did you earn $5 on the initial $100 deposit, you also earned $0.25 on the $5 in interest. While 25 cents may not sound like much at first, it adds up over time. Even if you never add another dime to that account, in 10 years you'll have more than $162 thanks to the power of compound interest, and in 25 years you'll have almost $340
a creditor’s legal claim to the collateral pledged as security for a loan is called a _____.
what is a lien
An example of a lien is a bank holding the title to a car until the car loan has been completely paid.
a financial institutions identification number
what is a Routing Number
the offer of a line of credit from a bank or company.
What is financing
you will see a lot of places advertise “we finance” this just means they work with a lender to open a line of credit in order for you to buy a vehicle from them. Any form of providing money or credit for something is financing.
Reflecting on how much money you have coming in and going out. this shows how your income and expenses line up, and how much you have left over afterwards