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personal finance chapter 2

Terms in this set (26)

This type of bank account gives highest interest rate but you can't touch your money for 12-18 months
CD (certificate of deposit)
Lowest interest rate- take money out whenever you want as often as you want
checking account (standard savings account)
Receiving this is the main reason anyone would ever loan money
interest
This place makes their business on giving short term high interest loan; but the drawback is you might lose your property if you fail to pay back the loan
pawn shop
Give you advance on your paycheck; but you have to give them your next paycheck with interest
check cashing center
Always be concerned if business asks you for
social security number
What can someone do with your social security number
identity theft
Charges illegally high interest
loan sharks
Term for when someone takes your identity and steals all your money
identity theft
In order to get you to deposit your money in a bank they will offer you this
interest
This sort of bank account has the benefit of higher interest but you can only take limited number of checks at high interest rate
money market account
Main way banks make money
interest on loans
Type of loan where house serves as collateral
mortgage
Example of fixed expense
insurance (you have to get it; can't negotiate price)
Flexible expense
food because you can buy it cheaper at certain stores
Discretionary expense
something you don't have to spend money on but you choose to (vacation)
Group that promises if you put money in a bank you won't lose it if bank closes
FDIC
Why does having a debit card make it easier to stick to a budget
money is right on hands so if you see something you'll want to buy it
Valuable property you give to a lender
collateral
Original amount of money
principle
You should NEVER write THIS on check
cash
You can use your checkbook and compare it to what to make sure your identity hasn't been stolen
bank statement
Two examples of personal information you have to protect
social security number and pin number
Amount of money remaining on a loan
balance
Only two circumstances under which you can get out of paying a student loan
death and disability
Two vocab words- money that goes in and money that goes out
income and expenses
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