Personal Finance Unit 2

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24 Terms

1
Interest
The amount you earn as a benefit of depositing money in an interest bearing account
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2
Maintenance Fee
A monthly fee that some banks charge to provide access to checking or savings accounts
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3
Money Market Savings Account
A type of savings account that may allow debit card and check writing privileges
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4
Inflation
The rate at which the price of goods increases and consumer purchasing power decreases over time
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5
Impulse Buying
The buying of goods without planning to do so in advance, as a result of a sudden whim or urge
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6
Living Paycheck to Paycheck
Using most or all of your monthly income to cover your monthly expenses, leaving little to no spare cash for saving or investing
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7
Minimum Balance
A certain amount of money that must be kept in an account as required by that particular financial institution
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8
50-20-30 Rule
A popular savings rule of thumb in which 50% of your income goes towards necessities, 20% goes towards saving and debt repayment, and 30% goes towards flexible spending
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9
Certificate Of Deposit (CD)
A bank product that earns interest on a lump-sum deposit that's untouched for a predetermined period of time
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10
Compound Interest
Reinvesting earned interest back into the principal to allow money to grow exponentially over time
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11
Direct Deposit
An automatic electronic deposit of net pay to an employee's designated bank account
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12
Emergency Fund
Money set aside for unanticipated expenses or loss of income
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13
Federal Deposit Insurance Corporation (FDIC)
The government agency that insures customer deposits if a bank fails up to $250,000 per individual depositor
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14
Online Savings Account
A type of savings account, typically offering higher interest rates, that is managed entirely online with no physical bank branch
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15
Pay Yourself First
A method of saving whereby you put a fixed amount of income into a savings account before you pay monthly bills or make purchases
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16
Purchasing Power
The number of goods and services that money can buy. It can weaken in time due to inflation
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17
Simple Interest
Interest paid on the principal alone
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18
Transaction Fee
A fee that is charged if the number of withdrawals from your savings account exceeds the federal limit, which is six free withdrawals and transfers per month
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19
Wealth
A measurement of your assets (money you've saved or things of value you own) minus your liabilities (money you owe others); also called net worth
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20
Unbanked
An individual or household that does not utilize putting their money in a checking or savings account
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21
Underbanked
An individual or household that has a bank account but lacks adequate access to other traditional financial services, such as credit and loans
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22
Overdraft Fee
A fee charged by the bank for lending you money when you overdraw your account
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23
Checking Account
A bank account from which payments can be ordered by a depositor
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24
Savings Account
A bank account that accumulates interest
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