Financial Literacy Part 1

Earnings Statement

A copy, or proof that a paycheck has been deposited.

Bankruptcy

A state of being in so much debt that you are legally declared unable to pay in full the people and companies you owe. Bankruptcy is designed as a way out for people that don't have another choice.

Balance

has three different meanings in financial terms. 1-when talking about loans 2- when talking about checkbooks 3- when talking about a checking or savings (a money account)

Savings/Checking Account Balance

the amount of money that is left in your account after you deposit or withdrawal money.

Loan Balance

the difference between the amount owed and the amount paid.

Collectibles

Objects such as art jewelry, baseball cards, and antiques that people buy in the hope that the object's value will increase.

Auto Insurance

This insurance helps you pay for damage you cause as a result of an accident to people or property, medical expenses you may have and the cost of fixing your car. It will also pay all these expenses if someone hurts you or your car and they do not carry insurance themselves.

Collateral

This is property used to assure the payment of a loan. In other words, if the borrower does not pay back the loan, the borrower must give up this property or money.

Finance Charge

This is the fee you pay when you do not pay off the entire credit card debt within a single payment period, usually about 25-28 days.

Earned Income

This is wages that you are paid in exchange for work.

Charge

This is when you borrow money (from a store, service provider, or credit card company) to make a purchase. If you do not pay the debt off in full within the card issuer's grace period (usually 25-28 days), you will pay interest on the amount you owe.

Appreciate

To grow in value. Usually a term used in relation to investments: stocks, collectibles, etc., which are now worth more than you paid for them.

Deposit

To put money into a bank or investment account.

Allowance

An amount of money parents give kids to help them learn to manage money.

Debt

Any money or goods you owe.

Expense

Anything you pay money for, including wants and needs.

Fixed Expense

Expenses which stay basically the same from month to month, such as housing and transportation.

Broker

Is a licensed professional who advises people about investments; also helps people buy and sell stocks, bonds, mutual funds, etc. The broker earns a fee for this help, called a commission, usually a percentage of the transaction.

Bond

Is an IOU issued by a corporation or government that confirms you are lending the corporation or government money. Bonds pay interest regularly to lenders. At the end of the term of the bond, the borrower returns to the lender the face value of the bond (the amount the lender invested in the bond).

ATM

Stands for Automatic Teller Machine. This is an electronic banking station that enables people to take care of banking business twenty-four hours a day, seven days a week.

Gross Pay

The entire amount of your income or paycheck before any deductions- like taxes or insurance payments- are subtracted.

Credit Limit

The highest amount you may charge on a credit card. Your limit is set by your card company's opinion of your ability to handle debt.

Corporation

The most common form of organizing a business the organizations's total worth is divided into shares of stock, and each share represents a unit of ownership and is sold to stockholders. A corporation is considered a separate entity from the stockholders for legal and tax purposes. Examples of corporations: Pepsi Cola, Intel, The Gap, McDonald's, Taco Bell, and Nike.

Annual Percentage Rate (APR)

The rate of interest that you are being charged for a loan over a year's time. The APR rate includes interest, transation fees, and service fees.

Face Value

The value printed on the bond.

Budget

a plan you create for controlling spending and to encourage saving.

Bank card

a plastic card that looks like a credit card, but is used to withdraw money from a savings or checking account. When you use a debit card at an ATM or to make purchases, money is immediately withdrawn from your account. You cannot withdraw more money than you have in the account. (includes debit cards and ATM cards)

Asset

any item of value that you own: house, land, gems, stocks, bonds, money in savings, etc.

Checkbook Balance

means to account for all money that came into and went out of your account so that at the end of the month you and your bank statement agree.