Vocabulary
A person who purchases goods and services for personal use.
What is a consumer?
An expense that stays the same amount each month, like rent or a car payment.
What is a fixed expense?
The total amount of money you earn before any taxes or deductions are removed.
What is gross income?
A card that withdraws money directly from your checking account when you make a purchase.
What is a debit card?
Something you want to achieve with your money that gives you direction and motivation for smart financial decisions.
What is a financial goal?
Money owed to another person or organization that must be repaid, often with interest.
What is debt?
A budgeting method where every dollar of income is assigned to a specific purpose.
What is a zero-based budget?
The amount of money you receive after taxes and other deductions are removed from your gross income.
What is net income?
A written document that instructs a bank to pay a specific amount of money to a person or organization.
What is a check?
A savings account through an online-only bank that offers higher interest rates (2%-5%) and lower fees.
What is an online savings account?
Something of value that you own and can be converted into cash.
What is an asset?
This budgeting rule suggests spending 50% on needs, 30% on wants, and 20% on savings and debt repayment.
What is the 50-30-20 rule?
A form you complete when starting a job that tells your employer how much federal income tax to withhold from your paycheck.
What is a W-4?
An automatic transfer of money from your account to pay a bill on a set date each month.
What is an auto payment?
An account where you agree to leave money untouched for a set period in exchange for higher interest rates.
What is a CD (Certificate of Deposit)?
A financial obligation you owe to someone else, such as a credit card balance or car loan.
What is a liability?
An expense that changes from month to month based on your choices and needs, like groceries or entertainment.
What is a variable expense?
A tax form your employer sends you by January 31st showing your total wages earned and taxes withheld during the year.
What is a W-2?
A record book where you track all checking account activity, including deposits, withdrawals, and your running balance.
What is a check register?
The "S" in SMART goals stands for this—your goal should be clear and detailed, not vague.
What is specific?
The total value of everything you own minus everything you owe.
What is net worth?
Money set aside in savings for unexpected expenses, with a best practice of saving 3-6 months of living expenses.
What is an emergency fund?
Federal Insurance Contributions Act taxes that fund Social Security and Medicare, automatically deducted at 7.65% of your paycheck.
What is FICA?
The process of comparing your records with your bank's records to ensure they match and catch errors or fraud.
What is reconciling your account?
A hybrid account combining features of checking and savings accounts with higher interest rates and check-writing privileges.
What is a money market account?