Financial Literacy Midterm Review

Abilities

Physical and mental skills developed through learning, training, and practice

Apprenticeship

A type of education that combines on-the-job training, work experience, and classroom-type instruction

Resume

A summary of your education, work history, and interests

Interview

An employer’s opportunity to visit with you and review your qualifications

Career ladder

An outline of jobs in a given career field that are available at different levels of education and training experience

Career plan

An outline of steps or action you can take to reach a career goal, including required courses and training, job-related experiences, and extracurricular activities or projects

Community college

Two-year school offering both academic and occupational courses

Continuing education

Learning pursued after a person completes formal education and training

OSHA

Federal Agency that enforces safety and health regulations in the worldplace

E-learning

Internet education and training programs

Interests

Activities, subjects, ideas, sports, or hobbies a person enjoys

Internship

A short-term position with a sponsoring organization to gain experience in a certain field of study

Occupational training

Program that prepares students for a specific type of work, available through schools and online

Reserve Officers’ Training Corps (ROTC)

Program offered by the military that offers education and training for low cost. Participants enter the service as officers upon graduation.

Aptitude

Natural physical and mental talents

Cover letter

A letter or message that is sent with your resume

Reference

A person qualified and willing to speak on your behalf

Career cluster

Sixteen general groupings of occupational and career developed by a partnership among the states, educators, and employers

Income

Form of money received, such as an allowance, paycheck, or gift

Entrepreneur

Person who owns and operates a business

Bonus

Money added to an employee’s base pay. It is usually a reward for performance or a share of business profits.

Commission

Income paid as a percentage of sales made by a salesperson

Compensation

Payment and benefits received for work

Disability

A limitation that affects a person’s ability to function in major life activities

Wage

Income from employment

401K

An investment program that helps employees save for retirement

Benefits

A form of nonmonetary compensation received in addition to a wage or salary

Entitlement

A government payment or benefit promised by to eligible citizens, such as Social Security and Medicare benefits, unemployment benefits, veterans’ services, food stamps, and housing assistance

Deduction

A tax benefit that reduces the amount of income a person is taxed on

Social Security Act of 1935

The law that requires the collection of social security payroll taxes

W-2

A Wage and Tax Statement that states the amount an employee was paid in the previous year. It also gives the amounts of income, Social Security, and Medicare taxes withheld from an employee’s income during the year.

Distance learning

Education or training delivered to the student online, by mail, or on television, offering many choices in both individual courses and total program options

W-4

The Employee’s Withholding Allowance Certificate that tells the employer how much tax to withhold from an employee’s paycheck.

Gross pay

A worker’s earnings before deductions

Interest

Payments from financial institutions, businesses, and government to use customers’ money

Medicaid

A government program administered by the states that pays certain health care costs for eligible low-income individuals and families

Medicare

A federal government program that helps pay the medical expenses of people 65 and older and others with certain disabilities

Minimum wage

The lowest hourly wage employers can pay most workers by law

Net pay

Gross income (plus bonuses) minus payroll deductions

Deductions

An amount subtracted from gross income

Piecework

A wage that is based on a rate per unit or item completed

Salary

Payment for work that is expressed as an annual figure

Social Security

The federal government’s program for providing income when earnings are reduced or stopped because of retirement, disability, or death.

Tax credit

An amount that can be subtracted from the taxes a worker owes, if eligible

Tax deduction

An expense that can be subtracted from a worker’s taxable income

Tips

Money paid for service beyond what is required

Unearned income

Earnings from sources other than work

Wage

A payment in exchange for an employee’s labor or services. The payment, which is usually in money, is paid by the hour, day, or by the piece.

Budget

Spending plan for the use of money over time based on goals and expected income

Balance sheet

Summary of the amount of money received as well as the amount paid out for goods and services during a specific period

Demographics

The statistical characteristics of the population

Price

The cost of a good or service a person buys

Crisis

Major problem that impacts the future of the family and its lifestyle

Life cycles

The stages of change a family passes through from formation to aging

Financial literacy

The understanding of the basic knowledge and skills needed to manage financial resources

Fixed cost

Set cost that must be paid each budged period

Income

Any form of money a person receives from various sources

Debt financial liability

Financial obligation that a person currently owes or will owe in the future

Net worth

The difference between what a person owns and owes

Net worth statement

Written record of a person’s current financial situation

Philanthropy

The act of giving money, goods, or services for the good of others

Record keeping

The process of setting up and maintaining an organized system for your financial affairs

Variable expense

Cost that changes both in the amount and time it must be paid

Wealth

An abundance of assets that are accumulated over time

ATM card

A card that allows customers to withdraw cash from and make deposits to their accounts using an ATM

ATM machine

A computer terminal used to transact business with a financial institution

Check registry

A record of checks, deposits, and charges on a checking account

Cashier’s check

A check drawn by a bank on its own funds and signed by an authorized officer of the bank

Certified check

A personal check with a bank’s guarantee the check will be paid

Commercial bank

A bank owned by stockholders and organized to receive, transfer, and lend money to individuals, businesses, and governments

Credit union

A nonprofit financial cooperative owned by and operated for the benefit of its members. It accepts deposits, makes loans, and provides other services.

Electronic funds transfer

The movement of money electronically from one financial institution to another

Endorsement

To sign one’s name on the back of a check in order to cash or deposit the check

FDIC

A U.S. government agency that protects bank customers by insuring deposits as well as examining and supervising financial institutions

Money order

An order for a specific amount of money payable to a specific payee

Mutual savings bank

A saving depository owned by the depositors that divides the profits among depositors in the form of dividends

The National Credit Union Administration

An agency that grants federal charters to qualified groups, supervises credit unions, and insures accounts in all federally chartered and many state chartered credit unions

Savings and Loan

A for-profit financial institution that receives and pays dividends on depositors’ savings, makes mortgage loans, and offers most of the service’s commercial banks offer

Traveler’s check

Checks that can be cashed in most places around the world. They are often used by people who travel and do not want to carry large amounts of cash.