FBLA Personal Finance 2019

Consumer Protection Laws

Created to ensure the rights of consumer, and fair trade, competition, and accurate info in the marketplace.

Federal Food, Drug, and Cosmetic Act

Set of laws that enable the FDA to oversee the safety of food, drugs, cosmetics

Fair Debt Collection Practices Act

Prevents debt collectors from using unfair tactics to collect from you.

Fair Credit Reporting Act

Promotes the accuracy, fairness, and privacy of consumer info contained in the files of reporting agencies

Truth in Lending Act

Promotes the informed use of credit by requiring disclosures about its terms

Fair Credit Billing Act

Protects consumers from unfair credit billing practices by providing guidelines for consumers and creditors.

Gramm-Leach-Billey Act (GLBA)

Requires financial institutions to explain their info-sharing practices to their customers an to protective sensitive info.

Credit Score

A number ranging from 300-850 that helps someone determine your likeliness to repay a loan

The Financial Planning Process

1. Determine financial goals

2. Evaluate financial status

3. Develop financial goals

4. Implement goal

5. Monitor goals

Law of Supply & Demand

When supply increases, demand decreases and vi versa.

Traditional Economy

Decisions are made based on culture and ritual

Market Economy

Prices are determined by supply and demand. People get to decide how to run things

Command Economy

The gov't controls the economy

Mixed Economy

Individuals make decisions, but the gov't regulates them.

Flat money

Valueless objects used as money because of a gov't decree

Commodity Money

Money consisting of objects that have value (gold, silver, etc.)

Time Value of Money

The increase of an amount of money due to earned interest of dividends

Gold Standard

The system where the value of currency was defined in terms of gold

Long-term goal

anything beyond two years

Budget

Used for organizing yourself and making sure that you don't spend more than you earn/have

Check registure

A personal record of your checking account activity

Gross personal income

Your salary w/o deducting taxes

Disposable income

the income available for you after taxes

Overtime

Compensation for any hours worked more than 40 hrs a week

Cafeteria Benefit

Allows staff to choose from a variety of benefits to make a plan bust suited to them

Maternity Laws

Pay period of absence from a worker to new mothers during the months before and after childbirth

Fringe Benefits

Benefits provided by an employer to an employee

Income Tax

Taxes on a persona yearly income

Excise Tax

Taxes paid when purchases are made on a specific good

Property Tax

Taxes based on the value of a persons property

Value-Added Tax

taxes on the amount by which the value of an article has been increased at each stage of production

Sales Tax

Tax on sales or on the receipts of sales (varies by state)

Progressive Tax

Taxes in which the tax rate increases as the taxable amount increases

Regressive Tax

Taxes imposed in a way where the tax rate decreases as the amount increases in value

Estate Tax

Taxes on the net value of the estate of a dead person before distribution to the heirs

Federal Insurance Contributions Act

Taxes used to fund Social Security and Medicare

IRS

tax-collecting agency

1040EZ Form

Requirements: your income is less than $100K, single or married filling jointly, under 65, claim not dependents, not a debtor, income comes only from wages

1040A Form

Many of the same requirements as the 1040EZ, but it allows you to claim credits for child and dependent care and education expenses, and you don't itemize deductions like mortgage or donations.

1099 Form

Says what kinda of income you may receive other than your salary

W-2 Form

Details annual salary and amount of taxes withheld from an employee's check

W-4 Form

Tells employer what amount of taxes to withhold from a workers check bases n their marital status, # of exemptions, dependents, etc.

I-9 Form

Used to verify the identity/employment of people hired in the U.S.

Mandatory Deductions

wages deducted from a paycheck to meet required obligations

Voluntary Deductions

Payments made by choice, retirement, insurance, etc.

Dependent Exemptions

When kids under 19 live with you for over 1/2 the year and provide less than half of financial support

Nontaxable Income

Child support, welfare, rebates, damage awards, etc.

Taxable Income

Earned income and unearned income

Job-Sharing

When 2 part time workers do a full time job and share the pay

Flextime

When the hrs of a worker has to work are set by the employer and are agreed by the worker

Telecommuting

Working from home

Credit Cards

Purchasing good/services on credit

Debit Cards

Purchase goods/services through transferring money from one account to another

Overdraft Fee

Fees when someones spends more than they have

Annual Percentage Rate

Annual rate charged for borrowing through an investment

Class-Action Lawsuit

When a group with similar injuries caused by a product or action sue the defendant

Arbitration

Abuse of an arbitrator to settle a dispute

Negotiation

2 or more parties reaching an agreement

Mediation

Intervention in a dispute in order to resolve it

Expressed Warranties

Sellers promise than a buyer relies on when they buy an item

Implied Warranties

A product is guaranteed to work

Consumer Reports

Series of reports on products and services used by consumers

Risk Management

Forecasting and evaluation of financial risks together w/ identification of procedures to minimize impact

yields

Income return on an investment

Rate of Return

Gain or loss on an investment over a specified period of time

Mutual Fund

Investment vehicle made up of a pool of funds collected from investors to invest in stocks

Hedge Fund

Limited partnership of investors that uses high rick methods in hopes of realizing capital gains

bonds

Loaning money to a company

Expense Ratio

Annual fee of a mutual fund

Stock

A share of ownership in a corporation.

Common Stock

Issues the shareholder rights to dividends and voting rights at meetings

Preferred Stock

Stock that doesn't offer rights, but has higher earnings

Dividends

Portion of a company's profits paid to stockholders

401k Fund

Retirement fund paid by employers

Broker

Person who arranges transactions between buyer and seller of a commission

SEC

Agency that oversees financial activities to prevent fraud

Compound Interest

Interest calculated on the initial principal & accumulated interest

Simple Interest

Method of calculating the charge on a loan

Futures Market

Central financial exchange where people can trade future contracts

Financial Risk

possibility of losing money from an investment

Credit Risk

Someone borrows money and can't pay off the loan

Liquidity Risk

Securities and assets that can't be bought of sold fast enough to cut losses

Asset-Backed Risk

Risk that asset-backed securities may become volatile

Foreign investment risk

Changes in political and economic climates around the world

Equity Risk

The risk w/ buying and selling stock

risk manangement

when firms use financial things to expose risks and get rid of them

Property & Liability Insurance

Insure the structure and content of a property for its owner

Liabilities

Financial obligations

Co-Pay

the upfront cost you pay

Premium

the money a person or business must pay for an insurance plan

Deductible

the amount of money someone pays for expenses before the insurance plan starts to pay

Health Insurance

A type of coverage that covers medical and surgical expenses

Disability insurance

insurance that offers income protection to people who have been disabled

Liability Coverage

Protects insured person from the risks of liabilities from lawsuits

Collision Coverage

Reimburse the insured for any damage of their personal car due to fault of the insured driver

Comprehensive Coverage

Protects you against vehicle damages caused by a collision

Personal Injury Protection

Extension that covers medical expenses due to collisions

Gap Insurance

Insurance car owners can buy to protect themselves against losses

Life Insurance

Insurance that pays out money to the dependents of the insured person at their death

Term Life

Benefit paid in the even of a person's death