Personal Finance Vocabulary Flashcards
(18 cards)
Salary
Compensation received by an employee for services performed. A salary is a fixed sum paid for a specific period worked, such as weekly or monthly.
Gross income
Total pay before taxes and other deductions are taken out.
Net income
Amount of money you receive in your paycheck after taxes and other deductions are taken out; also called take-home pay.
Minimum wage
A wage set by contract or by law as the lowest that may be paid to employees.
Overtime
Working time in excess of a standard day or week
ATM/Debit Card
A card used to make purchases at businesses (like grocery stores and gas stations) with money in your checking account.
Credit/Credit Card
An open-ended loan that allows you to borrow money up to a certain limit and carry over an unpaid balance from month to month. There is no fixed time to repay the loan as long as you make the minimum payment due each month. You pay interest on any outstanding credit card loan balance.
Credit Limit
A limit set by the credit card company on how much you can charge on the card it issued to you. You can use your credit card to make purchases up to your credit limit.
Credit Rating
An estimate of the amount of credit that can be extended to an individual or business without undue risk.
Account Balance
An account balance is a fundamental concept in accounting, representing the net amount in an account after summing debits, credits, and any beginning balance.
Principal
In the lending context, principal is the amount of money that you originally received from the lender and agreed to pay back on the loan with interest. In the investment context, it is the amount of money you contribute with the expectation of receiving income.
Interest
A fee charged by a lender, and paid by a borrower, for the use of money. A bank or credit union may also pay you interest if you deposit money in certain types of accounts.
Debt
Money you owe another person or a business.
Checking Account
An account at a bank (sometimes called a share draft account at a credit union) that allows you to make deposits, pay bills, and make withdrawals.
Savings Account
An account at a bank (sometimes called a share savings account at a credit union) used to set aside money and that pays you interest.
401(k)
a retirement account to which employee and employer contribute, on which taxes are deferred until withdrawal, and for which the employee usually selects the types of investments
APR
The cost of borrowing money on a yearly basis, expressed as a percentage rate.
Mortgage
Mortgage loans are used to buy a home or to borrow money against the value of a home you already own.
