unit 2 flashcards - finncial bussiness

Budget: A financial plan to balance spending and saving. A spending plan for managing money during a given period of time.

Credit score: A number determined by credit rating agencies that affects interest rates and credit eligibility for an individual.

Discretionary expenses: Expenses that may change from month to month, and which are optional with regard to how much or how little you choose to spend on them each month.

Down payment: A payment made up-front when purchasing or leasing an expensive item.

Emergency fund: Money set aside for unexpected, essential expenses.

Fixed expenses: Expenses that do not change from month to month, and which are not optional.

Incidentals: Minor expenses for items that are not essential.

Rent: The monthly payment which is required by a lease or contract. Items which can be rented may include expensive items like apartments, houses, and cars.

Security deposit: An amount of money which must be paid up-front as a protection for the landlord or rental company in case you cause damage to their property while you are using it. The security deposit is kept by the landlord or rental company until you return their property, and if all is well then you are refunded the security deposit.

Utilities: Services provided where you live, such as telephone service, cable service, Internet service, gas and electricity, water, sewer service, and trash collection.

Consequences: The effect, result, or outcome of an earlier action.

Financial plan: The process of setting spending priorities and taking action toward goals.

Insurance: An agreement to protect a person or business from specific risks in exchange for regular payments.

Interest: A fee charged for borrowing money.

Long-term goal: A goal or objective to be achieved that takes more than 1 year to accomplish; usually a long term goal may take 3-5 years.

Misfortune: Something bad or unexpected that happens.

Reserve: An amount of money kept back for future use.

Risk: The probability that injury, damage, or loss will occur.

Short-term goal: A goal that can achieved within a year.

Benefit: An advantage, privilege, right or financial reimbursement, such as a medical plan.

Cash: Paper bills or metal coins that are used to pay for things.

Check: A printed or written promise to pay a specific amount of money. Checks usually include your signa- ture, the name of a bank which will provide the money, and a bank account number that the money will come out of.

Credit: A loan of money from a financial institution which must be repaid by a certain date with interest.

Credit bureau: An agency which collects and sells information about how people use their credit, including if they make payments on time and how much credit they have available to them.

Credit report: A document that summarizes how many loans and credit cards you have, what their limits are, and whether or not you pay on time.

Debit card: A bank card that looks like a credit card but it takes money directly from your checking account to pay for the entire purchase all at once.

Mortgage: A loan from a bank or credit union for the purpose of buying a house.

Overspend: The act of spending more money than you actually have.

Repay: To pay back something that you borrowed.