Personal Finance Vocabulary Flashcards
(19 cards)
Salary
Compensation received by an employee for services performed
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
ATM
Stands for “automated teller machine,” a machine that lets bank customers perform basic transactions, such as deposits and withdrawals
Debit card
A card used to make purchases at businesses
with money in your checking account
Credit
Borrowing money, or having the right to borrow money, to buy something. Usually it means you’re using a credit card, but it might also mean that you got a loan
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 rating
An estimate of the amount of credit that can be extended to an individual or business without undue risk. (See also credit score)
Account balance
How much money you have in an account or how much money you owe
Principal
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 to another person or 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
Annual Percentage Rate (APR)
The rate required by Truth in Lending laws. It is designed to show customers the total cost of credit, including the stated interest rate plus certain finance and service charges
Mortgage
loans used to buy a home or to borrow money against the value of a home you already own
