Flvs PFFMM

Direct Subsidized loans

available to undergraduate students with financial need; the U.S.
Department of Education pays the interest while the borrower is in school

Direct Unsubsidized loans

available to undergraduate students and not based on financial need; the interest accumulates while the borrower is in school and they are responsible to pay it

PLUS loans

available to parents of undergraduate students or graduate students; the interest accumulates while the student is in school and the borrower is responsible to pay it

Gig employment

a means to earn income by providing on-demand goods and services, like ridesharing or reselling goods online

Cognitive bias

an error in thinking in which an individual uses personal values and experiences to make a decision, rather than logic

Endowment effect

a cognitive bias in which a person values an item more because they own it

Loss aversion

a cognitive bias in which an individual feels the weight of a loss more than that of a gain

Herd mentality

a cognitive bias in which an individual believes something is of value because the group believes it has value

Anchoring effect

a cognitive bias in which an individual uses the first piece of information they receive about something as a reference point when comparing subsequent information

Confirmation bias

a cognitive bias in which an individual looks for evidence that confirms what they already know or believe to be true

Present bias

a cognitive bias in which an individual prioritizes their needs and wants based on their present situation rather than a future outcome

Depreciate

to lose value over a period of time

Gross income

the amount of pay or income received before any taxes or deductions

Deductions

taxes or expenses subtracted from gross income

Net income

the amount of pay or income received

after any taxes or deductions

Entrepreneur

a person who starts, owns, and operates their own business

Capital

cash that is used for productive or investment purposes

Financial investment

a monetary asset obtained with the goal of increasing its value

Interest

rate paid or charged for use of money

Dividend

payout to stockholders of a portion of company profits, based on number of shares owned

Capital gain

a profit made on the sale of assets hat have increased in value

Withhold

to deduct money from an employee's paycheck and send it directly to the government

Taxes

payments the government requires people to pay to help fund government services.

Indirect taxes

money paid to the government through an intermediary for rights, privileges, or activities

Direct taxes

money paid straight to the

government

Income tax

a compulsory payment the government collects based upon income earned by a person or a

corporation

Payroll tax

a tax levied on employers and employees to cover federal programs such as Social Security and Medicare

Corporate Tax

a tax on the profits of a corporation or business

Sales tax

a tax levied on goods and services by state and local governments

Gasoline tax

a tax added to the price of fuel for vehicles

Property tax

a tax levied by the government on tangible assets such as real estate and vehicles

Escrow account

account set up by a mortgage lender to pay property taxes and insurance

Estate tax

a tax on the value of a deceased person's property before it is disbursed to beneficiaries

Progressivity

as income rises, refers to whether the proportion of income to taxes increases, decreases, or stays the same

Proportional tax

a tax system where all incomes are taxed at the same percentage or rate

Regressive tax

a tax system where all incomes are taxed at the same rate, but the tax takes a larger percentage of income from people with lower incomes

Progressive tax

when a person's income increases, the percentage of taxes paid to the government also increases

Marginal tax rates

the tax percentage that applies to the last dollar of income earned

Taxable income

the amount of income subject to income tax under the law after deductions and credits

Credit-worthiness

how risky it may seem for creditors to lend you money

Contract

a formal and legally binding agreement between two or more parties

Debt

money borrowed from or owed to lenders

Loan

money borrowed from a lender and paid back over time with additional interest

Down payment

cash available at the time of purchase to put toward a large purchase such as a house or car

Principal

the amount remaining of the originally borrowed loan