Managing Your Personal Finances – Vocabulary Review

250 vocabulary flashcards summarizing essential terms from the lecture notes to aid exam preparation.

Data mining

Process of collecting data from many sources and summarizing it into useful information.

Web mining

Extracting data specifically from web sources using algorithms and visitor information.

Data warehousing

Storing and managing large amounts of data from multiple sources for retrieval and analysis.

Identity theft

Fraud that occurs when personal information is stolen or misused for financial gain.

Upgrading

Improving or advancing one’s job skills to increase value to an employer.

Retraining

Learning new skills to maintain or regain employability.

Self-assessment inventory

Personal survey listing one’s strengths and weaknesses for career planning.

Rewards card services

Programs that track purchases and grant redeemable points; a form of data mining.

Online application

Submitting job or service forms electronically rather than on paper.

Cash (or prepaid) card

Card pre-loaded with funds; safer because it carries no personal data.

Résumé

One- or two-page summary of qualifications, experience, and skills for employment.

Reference letter

Formal document in which another person attests to your character and abilities.

Follow-up

Post-interview contact (thank-you note, call, visit) to remain memorable to an employer.

Career planning

Cycle of self-analysis, research, action plan, and re-evaluation to reach career goals.

Avocation

Secondary occupation pursued in addition to one’s primary job.

Lifestyle business

Company intended to provide income for the owner’s lifetime and close upon retirement.

Executive summary

Section of a business plan that briefly overviews the entire proposal.

Standard workweek

Typical schedule of 40 hours worked over five days.

Overtime pay

Wage rate of 1.5 times regular pay for hours worked beyond the standard week.

Allowance (tax)

Claim on a W-4 that reduces the amount of tax withheld from pay.

Pay stub

Detailed statement listing gross pay, deductions, and net pay.

Net pay

Take-home income after all deductions; usually 65–70 % of gross pay.

Medicare tax

1.45 % of all earnings withheld to fund federal health care for seniors.

Social Security tax

6.2 % of wages up to an annual limit for retirement and disability benefits.

Workers’ compensation

Legally required insurance that pays benefits for job-related injuries.

Unemployment compensation

State-run benefit replacing part of wages for eligible unemployed workers.

Bereavement pay

Paid time off granted for the death of an immediate family member.

Pension plan

Employer-funded retirement plan promising a set payment at retirement.

Sabbatical

Paid leave, often for study or travel, granted after a period of service.

Cafeteria-style benefits

Program allowing employees to pick among benefit options up to a set dollar amount.

Telecommuting

Working off-site by electronic link (often cloud-based) to the employer.

Flextime

Choice of work hours within employer-defined limits.

Compressed workweek

Completing 40 hours in fewer than five days.

Job rotation

System of employees regularly moving among different tasks or departments.

Job sharing

Two people splitting one full-time job and its benefits proportionally.

Grievance

Formal employee complaint against an employer.

Craft union

Labor union for workers skilled in a particular craft (e.g., carpenters).

Industrial union

Union covering all workers in a specific industry (e.g., steel).

Retail union

Union representing employees in retail sectors such as groceries or pharmacies.

Public employee union

Union for government workers like teachers, police, or firefighters.

Lobbying

Paid effort to influence lawmakers on behalf of a group’s interests.

Progressive tax

Tax taking a larger percentage as income rises (e.g., U.S. income tax).

Regressive tax

Tax taking a smaller percentage as income rises (e.g., sales tax).

Proportional tax

Flat-rate tax taking the same percentage of all incomes.

Audit

IRS examination of a taxpayer’s return for accuracy.

Correspondence audit

Most common audit; IRS requests documentation by mail.

Office audit

Taxpayer meets IRS examiner at an office to answer questions and show records.

Field audit

IRS agent visits the taxpayer’s home or business to inspect records.

Tax exemption

Amount subtracted from income for each taxpayer and dependent.

W-2 form

Statement of annual wages and taxes withheld given by an employer.

Form 1099-INT

Tax form reporting taxable interest income.

Form 1099-DIV

Tax form reporting dividend income.

Form 1099-G

Statement reporting unemployment compensation and certain government payments.

SSA-1099

Form showing Social Security benefits received; part may be taxable.

Alimony

Court-ordered payments to an ex-spouse; taxable to recipient, deductible to payer.

Adjusted gross income (AGI)

Income after specific adjustments, used to determine deductions and credits.

Itemized deductions

Qualified expenses subtracted from AGI to lower taxable income.

Standard deduction

Preset amount taxpayers may subtract instead of itemizing deductions.

Tax credit

Direct reduction of tax liability; worth more than a deduction of equal size.

Exempt status

Claim on W-4 indicating no income tax will be owed for the year.

Estimated tax

Quarterly payments of projected tax without accounting for withholdings

Form 1040X

Amended tax return used to correct a previously filed return.

Budget

Plan for income allocation involving estimates of earnings, spending, and saving.

Solvent

Having more assets than liabilities; able to meet debts.

Personal property inventory

Detailed list of movable valuables with purchase and current values.

Express contract

Agreement whose terms are stated orally or in writing.

Implied contract

Agreement created by actions or circumstances, not written or spoken.

Counteroffer

Response that changes original contract terms, creating a new offer.

Consideration

Something of value exchanged in a contract, making it enforceable.

Capacity (contract)

Legal ability of parties to enter a binding agreement.

Legality (contract)

Requirement that a contract’s purpose be lawful.

Notarization

Official certification that a signature is genuine and voluntary.

Promissory note

Written promise to pay a stated sum at a specified time.

Negotiable instrument

Unconditional written promise to pay on demand (e.g., check).

Maker

Person who signs a promissory note agreeing to pay.

Payee

Person to whom money is payable on a note or check.

Implied warranty

Unwritten guarantee that a product will perform its intended purpose.

Demand deposit

Bank deposit withdrawable on demand, such as a checking account.

Overdraft

Writing checks for more than the account balance; incurs a fee.

Check float

Risky practice of writing a check before funds are available, hoping to deposit later.

Deposit slip

Bank form listing cash and checks being deposited.

Blank endorsement

Signing the back of a check exactly as written on the front.

Special endorsement

Transfers a check to a new payee ("Pay to the order of…").

Restrictive endorsement

Limits check use, e.g., "For deposit only."

Money market account

Bank account with higher interest and limited transactions; requires minimum balance.

Share draft account

Credit union’s version of a checking account, often fee-free.

Certified check

Personal check guaranteed by bank; funds set aside at certification.

Cashier’s check

Check drawn on bank’s own funds, guaranteeing payment to the payee.

Money order

Prepaid paper payment instrument that cannot bounce.

Overdraft protection

Bank service that covers insufficient funds via fee or linked credit.

Stop-payment order

Request that a bank refuse payment on a check; valid about six months.

Truth in Savings Act

Federal law requiring clear disclosure of fees and yields on deposit accounts.

Subsidized loan

Student loan with no interest accruing until after education ends.

Unsubsidized loan

Student loan on which interest accrues immediately upon disbursement.

Yield

Percentage increase in savings from earned interest.

Liquidity

Ease of turning an asset into cash without loss of value.

Certificate of Deposit (CD)

Time deposit with fixed term and interest; penalty for early withdrawal.

Money market fund

Mutual fund investing in short-term, low-risk securities, paying higher interest.

NCUA

National Credit Union Administration; insures credit union deposits.

Direct deposit

Electronic transfer of net pay into a bank account.