personal finance final

consumer

a person or organization that uses a product or service

personal finance

all the financial decisions an individual or family must make in order to earn,budget,save,spend,and give money over time

debt

money owed to another person or company

paycheck to paycheck

an expression used to describe a person or house hold whose monthly income is devoted to expenses and has little to save

credit

the granting of a loan and the creation of debt, any form of deferred payment

interest rate

the precentage of principle charged by the lender for its use of money

loan shark

person or entity that charges borrowers interest rates above an established legal rate

interest

the additional cost a lender charges for borrowing their money

financial plan

a plan that allows a person to meet not only their immediate needs but also their long term goals

net worth

the amount by which the value of a persons assets exceeds or falls behind the value of their liabilities

asset

anything that is owned by an individual, including money in the bank or investments

liability

financial debts or obligations

positive net worth

the dollar value of a persons assets is greater than the dollar value of their liabilities

negative dollar net worth

the dollar value of a persons liabilities is larger than the value of their assets

net income

what a person earns after payroll taxes and other deductions are taken out often referred to as take home pay

expense

the cost of goods or services, money paid out

financial literacy

the knowledge and skill based necessary for people to be informed consumers and manage their finances effectively

budget

a written plan for giving,saving,spending

fixed expense

expenses that remains the same month to month

variable expenses

expenses that varies in dollar amount from month to month but that you can expect to have every month

intermittent expense

expenses that occurs at various times throughout the year and tends to be in large lump sums

discretionary expenses

expenses for things you don’t need

zero based budget

a cash-flow plan that assigns an expense to every dollar of your income. the goal is for the total income minus the total expenses to equal zero

gross income

the amount you earn before taxes and other payroll deductions

cash flow statement

a record that summarizes all of the income and outgo over a certain period of time

irregular income

income that comes in at different amount or at different times or both

commission

earnings based on a percentage of the sales made

emergency fund

a savings account specifically to be used to cover financial emergencies

large purchases

a large purchase that requires a significant amount of money

interest rate

the percentage of principle charged by the lender for the use of its money

accured interest

the amount of interest charged on a debt but not yet collected; interest accumulates from the date a loan is issued

compound growth

the average rate of growth for investment over time; often expressed as an annual figure

compound interest

interest paid on top of interest previously earned

principle

the inital amount of money invested or borrowed

rate of Return

the measure of an investments profit or loss, usually expressed as a percentage of the initial investment

inflation

the persistent rise of the cost of goods and services over time

time value of money

concept that an amount of money is worth more today than in the future due to earning potential

revolving credit

credit that automatically renews whenever a payment is made to reduce the debt

collateral

something owned offered as a security on a debt; if the debt is not repaid as agreed, the item is forfeited to the lender

lien

a legal claim against an asset until the debt is paid off

appreciating asset

an asset that increases in value over time

equity

the increase in value of a home over time; the difference between the amount owed and what the home can be sold as

default

failure to repay a loan on time

installment credit

a loan for a fixed amount of money thats paid back in monthly installments

depreciating asset

an asset that loses value over time, such as a car that’s worth less every year

predatory lending

a lender who uses deceptive, unfair or fraudulent practices on borrowers who are desperate for cash

credit score

a statistical number used to represent a consumers creditworthiness

credit bureau

a company that collects credit rating information and makes it available to creditors

term

the amount of time in months that you’ll be making payments

depreciation

the loss of value of an asset over time

negative equity

when the value of an asset falls below what it is owed on

amygdala

the part of your brain that helps regulate your stress response

prefrontal cortex

the part of your brain that controls memory, impulses and thoughts

retail therapy

the shopping people do to lift their mood when they’re discontent

impulse buying

buying anything without planning to do so in advance

buyers remorse

a feeling of guilt regret or unease after making a purchase

consumerism

the theory that spending money and consuming goods is good for the economy

marketing

the process of communicating the value of a product or service to customers

brand recognition

the publics ability to recall and recognize a brand by its logo jingle packaging or name

manufactors recognition

a promise from the manufacturer that a product will be replaced or repaired if its faulty

extended warranty

extra coverage for the repair or replacement of items purchased

opportunity cost

the financial opportunity that is lost when you choose to do something else with your money

card fraud

the unauthorized use of your debit or credit card number and pin or the forging of your signature

identity theft

the act of fraudulently gaining and using the personal information of someone else usually for financial gain

contentment

the state of being satisfied with who you are and what you have in life

hard skills

technical skills that are learned and that require IQ

soft skills

character traits and interpersonal skills requiring EQ that guide how you interact with others

resume

a french word meaning sum up or a summary

entrepreneur

someone who starts and runs their own business

personal brand

a widely recongnized perception or impression of an individual based on conduct experience skills and action

sweet spot

the spot where what you love to do the most intersects with what you do the best

discovery

the act of finding something out

proximity principle