Financial Literacy Part 1

These flashcards cover key concepts related to financial literacy, including definitions and explanations regarding earning, saving, borrowing, and managing finances.

Financial Literacy

The understanding of basic financial skills and concepts.

Fair and Accurate Credit Transactions Act of 2003

A law that aims to regulate and protect consumers in credit transactions.

Earn

The ability to generate income and understand the components of that income.

Net Pay

The amount of money you take home after taxes and deductions.

Saving

The process of setting aside money for future use, crucial for financial preparation.

Emergency Fund

Savings set aside for unexpected expenses.

Budget

A plan for managing income and expenditures.

Open-end loans

Loans that allow borrowers to use credit for various purchases, requiring minimum payments.

Close-end loans

Loans used to finance specific purchases, with equal monthly payments over time.

Secured Loans

Loans backed by collateral, like homes or cars.

Unsecured Loans

Loans not backed by collateral, such as credit cards or personal loans.

Interest Rate

The cost of borrowing money, expressed as a percentage of the unpaid principal.

Annual Percentage Rate (APR)

The total cost of a loan expressed as an annual interest rate, including fees.