PFL- Cluster Vocabulary

Checking Account

A bank or credit union account that allows withdrawals by writing a check or using a debit card associated with the account.

Withholding

Employer deductions from employees' earnings to pay employees' taxes.

Assets

What a person owns, such as cash, stocks, bonds, real estate and personal possessions.

Gross Income

The total amount of income from wages before any payroll deductions

Identity Theft

When someone uses your name, social security number, credit card number and/or other personal information without your permission.

Finance Charges

The interest paid on unpaid credit balances.

Dividend

The portion of the profits paid to the shareholders of a company.

Revolving Credit

An open-ended account with a limit to how much can be borrowed but no time limit for repayment.

Investment

Setting aside money for future income, benefit, or profit to meet long-term goal; using savings to earn a financial return.

Fixed Expenses

Expenses that cost the same amount every time.

Variable Expenses

Expenses that are not fixed.

Net Income

Also called "take home pay," it's the amount of income left after payroll deductions.

Savings Account

An account you have at a financial institution that helps you accumulate and save money and earn interest at the same time.

Savings

Money set aside for short-term goals.

Return

Earnings from an investment, usually expressed as an annual percentage rate.

Annual Percentage Rate (APR)

The finance charge or total amount it costs per year to use credit, calculated as a percentage of the amount borrowed, including interest, transaction fees and service charges.

Budget

A plan for managing money, dividing up expected income and expenses among spending and saving options based on personal goals during a given time period.

Capital

The value of personal items that one owns, including savings, investments and property.

Yield

The profit from an investment.

Bankruptcy

Legal process for selling most of the debtor's property to help satisfy debts that cannot be repaid, in exchange for relieving debtors of the responsibility of paying their financial obligations or protecting them while a plan is created and they try to repay debts.

Taxes

A compulsory payment by individuals/organizations to the government; fees placed on income, property or goods to support government programs.

Employee Benefits

Additional benefits, beyond a paycheck, offered by employers (e.g., health insurance, retirement plan).

Debt

The entire amount of money owned to lenders.

Deductible

The amount of a loss you must pay out of your own pocket before the insurance company will step in and pay the rest.

Spending

Using income for current consumption.

Liquidity

The ease with which an asset can be converted to cash without serious loss.

Pay Yourself First

Disciplined saving or setting aside money as a regular part of the budget for later spending or investing.

Credit Card

Card that enables holder to charge expenses for purchases or to get money, often with interest.

Credit Rating/Score

A measure of creditworthiness based on an analysis of the consumer's financial history, often computed as a numerical score, using the FICO or other scoring systems to analyze the consumer's credit.

Credit Union

A financial institution owned by its members that provides savings and checking accounts and other services to its membership at low fees.

Mutual Fund

An investment security that is actually a diversified portfolio of equities, bonds or other securities. Investors purchase shares and can sell them at any time.

Insurance Premium

The payment a person makes to an insurance company in exchange for its promise of protection and help.

Appreciation

A rise in value or price.

Annual Fee

The amount that credit card companies charge for the use of a credit card.

Principal

The amount of money someone is willing to loan you. Also, the amount that is still owned on a loan.

Credit

Amount of money a creditor is willing to loan another to purchase goods and services, based on trust and the expectation that the money will be repaid as promised with interest.

Credit Report

A written record collected by a credit agency that tracks a borrower's credit payments, whether or not the payments are made on a timely basis and how long the borrower has had various credit accounts.

Debit Card

A card used to pay for goods and services directly from a checking account by transferring funds electronically from one's checking account to the store's account to pay for a purchase.

Diversification

Distributing funds among different types of investments to minimize overall risk.