Fin Lit Units 2 & 3

Employee benefits

Products or services provided by an employer that provide extra value beyond wages

Commission

A few that a salesperson receives upon completion of a sale

Dependent

A person who relies on the taxpayer for financial support

Direct Deposit

Wages are deposited directly into a depository institution account

Employer contributions

The amount the employer has contributed to various employee benefits

W-4 Form

Form that determines the amount an employee’s pay that will be withheld from federal taxes

Income tax

Taxes paid to federal, state, and local governments amount of money earned

Medicare

A federal program whose main purpose is to help pay for health care for those over 65

Paper paycheck

A check written to a worker in the amount of money earned

Payroll card

A reloadable debit card onto which a workers pay is loaded

Payroll tax

Taxes withheld or paid on your behalf by your employer

Pay period

The regular schedule by which employers pay employees

Pay stub

Outlines the deductions made to wages

Social security

A federal government program that funds retirement accounts, financially supports citizens who have experienced profound disability, the premature death of a parent, or widowed women

Tax liability

Total tax bill

Unemployment insurance

A source of income for workers who have lost their jobs through no fault of their own

Workers’ Compensation

A states-sponsored system that pays monetary benefits to workers who become injured or disabled on the job

Excuse tax

Taxes collected from the seller or retailer and as such often remain hidden in the price of a product or service rather than being listed separately

Property tax

A tax on property, such as land, buildings, and motor vehicles

Sales tax

A tax on purchased goods and services

Asset

Items of monetary value a person or household owns

Expense

Money spent

Income

Money received

Investment asset

Financial assets purchased with the hope that they will generate income and appreciate in value to make it possible to sell at a higher price in the future

Liability

A debt or obligation owed to others

Market Value

The amount you could realistically sell an asset for today

Monetary asset

Assets that can be quickly and easily converted to cash

Net worth

A measure of financial wealth and indicates the monetary value of all possessions that a person or household owns, minus the total amounts owed to others

Statement of Financial Position

A financial statement that describes an individual or family’s financial condition in a specified date by showing assets, liabilities, and net worth

Tangible Asset

Personal property that was purchased to create a lifestyle or improve your life

Wealth

A measurement of how much a person or household owns once all debts have been paid

Spending plan

An income and expense statement sometimes referred to as a budget which records both planned and actual income and expenses over a period of time

Compound Interest

Earning interest on interest

Consumption

The purchase of goods and services

Emergency Savings

Cash set aside to cover the cost of unexpected events

Interest

Price paid for someone else’s money

Interest rate

Percentage rate used to calculate ones interest

Liquidity

How quickly and easily assets can be accessed and turned into cash

Pay yourself first

Saving for the future by putting money aside before paying regular monthly bills or using income for discretionary purchases

Saving

Accumulation of excess funds by intentionally spending less than you earn

Savings

Portion of income not spent on consumption

Time value of money

Money available at the present time is worth more than the same amount if received in the future

Certificate of deposit

Used for a fixed period of time and allows restricted access to the funds deposited

Checking account

An account that allows quick access to funds for transactions

Money market deposit account

An account at a depository institution that usually has minimum balance requirements and tiered interest rates

Savings account

Accounts offered by depository institutions that are designed to hold money not spent on current consumption

Savings tools

Accounts offered by depository institutions whose main purpose is to help people manage their money

Tiered interest rate

The amount of interest earned depends on the account balance