Choose to Save Vocabulary List
Emergency Savings
Cash set aside to cover the cost of unexpected events. (Normally about 6 months of income)
Compound Interest
Earning interest on interest.
Trade-off
Giving up one thing for another.
Liquidity
How quickly and easily assets can be accessed and converted into cash. (Cash --> checking accounts --> savings accounts)
Time Value of Money
Money available at the present time (today) is worth more than the same amount if received in the future.
Do It Yourself (D.I.Y.)
When you complete a task yourself rather than paying someone else.
Pay Yourself First
Saving for the future by putting money aside before paying regular monthly bills or using income for discretionary purchases.
Saving
Accumulation of excess funds by intentionally spending less than you earn. (Action)
Interest Rate
Percentage rate used to calculate interest.
Savings
Portion of income not spent on consumption (Noun)
Principal
The original amount of money saved or invested.
Interest
The price paid for using someone else's money.
Consumption
The purchase of goods and services.
Opportunity Cost
The value of the next best alternative that must be forgone as a result of a decision.