Financial Literacy vocab 1

asset

a valuable resource that is owned by a person, company, or government in order to get an economic benefit

net worth

a measurement of your assets minuses your liabilities (money you’ve saved - money you owe others)

cost of living

the amount of money needed to sustain a certain level of living in a certain locality, including basic expenses such as housing, food, taxes, and healthcare

budget

a plan of your expected income and how you will use it to meet your expected expenses over a period of time

income

money that is received from work, investments, business, etc.

expenses

items or services you pay for such as rent, groceries, entertainment, bills, etc.

variable expenses

a cost that appears irregularly or that changes in amount (ex: utility bills)

fixed expenses

a cost that can be expected at regular intervals and that remains the same amount (ex: monthly rent payment)

needs

expenses that are essential for you to be able to live and function

salary

a fixed amount that you are paid over a period of time, regardless of how many hours you work

wants

expenses that help you live more comfortably

wage

a set amount you are paid for every hour that you work; also called hourly pay

credit

a sum of money deposited INTO an account

debit

a sum of money deducted FROM your account

balance

the amount of money you have in your bank account

deposit

money you put into your account

endorse

to sign the back of a check made out to you so it can be cashed or deposited

reconcile

to compare your bank’s monthly account statement with your own records of activity for the same account

interest

a fee paid to you for keeping your money in an account OR a fee charged to you for a loan or credit card

maintenance fee

a monthly fee that some banks charge to provide access to checking or savings accounts

FDIC insurance

protects the deposits of customers against loss up to $250,000 per account

bank statement

a monthly document prepared by your financial institution which shows all of the transactions related to your account

debit card

a card that is directly connected to your checking account; it enables you to conduct ATM transactions and to make purchases instead of using cash

credit card

a card that allows the holder to make purchases without cash by borrowing money

gross pay

what employees earn before taxes, benefits, and other payroll deductions are withheld from their wages

net pay

an employee’s earnings total after all deductions are subtracted

principal

the original amount your borrowed on the loan

term

a fixed or limited period for which something is intended to last

direct deposit

electronic payment method that moves money straight into your bank account without using a paper check