Chapter 1 Flashcards
(16 cards)
all the financial descisions an individual or family must make in order to earn, budget, save, spend, and give money over time
Personal Finance
A person or organization that uses a product or service
Consumer
Money owed to another person or company
Debt
an expression used to describe a person or household who’s monthly income is devoted to expenses and has little to no savings
Paycheck to Paycheck
The gaining of a loan and the creation of debt; any form of deffered payment
Credit
The percentage of principle charged by the lender for use of its money
Interest Rate
person or entity that charges borrowers interest rates above an established legal rate
Loan Shark
The additional cost a lender charges for borrowing their money
Interest
A plan of action that allows a person to meet not only their immediate needs but also their long-term goals
Financial plan
The amount by which the value of a persons assets exceeds or falls behind the value of their liabilities
Net Worth
Anything that is owned by an individual, including money in the bank or investments
Asset
Financial debts or obligations
Liability
The dollar value of a persons assets is greater than the value of their liabilities
Positive Net Worth
The dollar value of a persons liabilities is larger than the value of their assets
Negative Net Worth
What a person earns after payroll taxes and other deductions are taken out; often refered to as take-home pay
Net Income
The cost of goods or services; money paid out
Expense
