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Financial Terms I
Terms in this set (29)
the amount of your income or paycheck after any deductions - like taxes or insurance payments that are subtracted. This is your take-home pay.
Gross pay -
the entire amount of your income or paycheck before any deductions
Income tax -
money that wage earners pay the government to run the country. The amount of the tax depends upon how much you earn
Earnings statement -
a paper copy, proof that a paycheck has been electronically deposited in a bank account; an employer sends employees earnings statements to confirm that a paycheck has been electronically deposited in the employee's bank account
Social security tax -
a tax used to fund a program of the US government that gives money to elderly people. The elderly receive funds because the federal government has deducted money from each of their paychecks during the course of their working lives.
Savings account -
a bank account that pays you interest for keeping your savings in it. Banks use your money to make loans, so they pay you interest for the use of your money
the amount paid by a borrower to a lender for the privilege of borrowing the money
Interest rate - the price paid for the use of someone else's money expressed as an annual percentage rate, such as 6.5%
Balance (checking accounts) -
balancing means to account for all money that came into (deposits) and went out (withdrawals) of your account, so that at the end of the month you and your bank statement agree (the amounts are the same).
Balance (savings accounts) -
your balance is what is left in your savings account after you deposit or withdraw money.
Balance (loans) -
the balance is the difference between the amount owed and the amount paid on a debt. If you pay $45 on a $100 debt, your balance is $55.
to put money into a bank or investment account
The act of taking money out of an account.
Automatic Teller Machine. This is an electronic banking station that enables people deposit and withdraw money, pay loans, etc (24 hours a day/7 days a week)
how quickly an asset (any item of value that you own) can be turned into cash
Debit card -
this card looks like a credit card, but it is used to withdraw money from a savings or checking account. When you use a debit card at ATMs or in stores to make purchases, money is immediately withdrawn from your account.
FDIC insured -
established as part of the Banking Act of 1933, the Federal Deposit Insurance Corporation (FDIC) protects bank customers from possible losses by insuring various kinds of accounts.
Compound interest -
interest on an investment, like a savings account, that is calculated not only on the money you originally invested, but also on any interest the investment has already earned.
Overdraw (or an overdraft) -
to take more money out of an account than is available in the account. You write a check for $25.00, but your account contains only $20. You will have to pay the bank a penalty charge for going over the limit.
Check register -
a small booklet comes with your checkbook and gives you record sheets that so you can keep track of all the deposits, ATM withdrawals, and checks you write. If you keep your check register up-to-date, you always know how much money you have in your checking account.
money that is lent, usually with the understanding that the loan will be paid back, usually with interest.
money that you owe
this is the amount of money you borrow on a loan. You pay this back plus interest.
Credit rating (score) -
this is a score that credit companies assign to you based on how you handle your money and pay your bills.
usually refers to the money borrowed from a lender (mortgage company) to buy a house; the borrower makes payments on the loan each month until the entire loan, along with interest, is paid in full.
Late fee -
A fee charged to you for missing a payment date. If your payment arrives "late" or not at all, the charge is added to your debt. Late fees are strong penalties. Credit companies routinely charge $30 or more if you miss your payment date.
Finance charges -
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. This includes the interest the credit card company charges to borrow money.
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.
things you pay money for - both needs and wants (electric bill, movie tickets, car insurance...)
a state of being in so much debt that you are legally declared unable to pay in full the people and companies you owe. When you legally declare yourself bankrupt in some states, you must sell off all your possessions and pay off your debts as best you can.
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