Personal Finance
Terms
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- Surplus
- when you are under budget
- Solvency
- positive net worth, you own more than you owe.
- MMMF
- Brokerage firm, High interest rate, some checking privileges, limited risk due to short maturity of investments, lends itself well to an automated payroll deduction plan, minimum initial balance between $500 and $1000. Min Cks. Not Fed Insured
- Audits
- an examination of your tax return by the IRS
- Credit Unions
- Are like banks but are non-profit
- Repossession
- Taking back of Cars, boats, appliances
- Equity
- Net worth, a measure of the level of your wealth. It is determined by subtracting the level of your debt or borrowing from the value of your assets.
- Credit Scoring
- a numerical evaluation or "scoring" of credit applicants based on their credit history.
- Bracket Creep
- the movement into higher tax brackets as a result of inflation increasing wages. Brackets are increased.
- Inflation
- an economic condition in which rising prices reduce the purchasing power of money.
- Take Home Pay
- Money-after tax income
- Travel and Entertainment Cards
- credit card in initially meant for business customers to allow them to pay for travel and entertainment expenses, keeping them separate from their other expenditures.
- W-4
- what you fill out when you go to work
- Liquidity
- the ability to get your money when you need it.
- Fixed Expenditures
- Expenses you do not have control over month to month.
- Child Credit Act
- tax credit that offsets your taxes in a direct dollar for dollar manner for child and dependent care expenses.
- Progressive Tax rate
- tax system in which tax rates increase for higher incomes
- Traveler's Checks
- are similar to cashier's checks except that they do not specify a specific payee, and they come in specific denominations ($20, $50, $100) Advantage of traveler's checks is they are accepted almost anywhere in the world, because they are viewed as riskless checks.
- Taxable Income
- Income subject to taxes.
- Deficit
- when you are over budget.
- Adjusted Balance
- calculating interest payments on outstanding credit in which interest payments are charged against the balance at the end of the previous billing period less any payments less any payments and returns made.
- Demand Deposit
- convenience, easy to use, low mimum balance, Insured, no interest or low relative interest, minium requirements can be costly.
- 1040X
- Amended taxes, 3 years
- Debit Cards
- a card that allows you to access the money in your accounts electronically
- Convenience User
- Pays off the balance every month (annual fee don't want) (interest rate don't care)
- Estimated Taxes
- 1040Es, not enough is witheld
- Previous Balance
- Calculating interest payments on outstanding credit using the balance at the end of the previous billing period.
- 1040Es
- estimated taxes filed quaterly
- Financial Principles
- 15 principles that form the foundations of personal finance. Some are as much statements of common sense as they are theoretical statements.
- Balance Sheet
- A statement of your financial position on a given day.
- Truth in Lending
- Credit legislation that is federal they have to tell you the truth about their lending. Have to tell the whole truth in lending practices.
- Insolvency
- condition in which you owe more money than your assets are worth.
- Liquid Assets
- Assets that can be easily sold and turned into cash.
- Capital Gain and loss
- gain is what you make if you sell a capital asset for a profit, losses is what you lose when you sell a capital asset for a loss.
- Cash Advances
- taking out a loan when you get a cash advance- and it's an extremely expensive way to borrow money. Withdrawing cash from an ATM using your credit card
- Adjusted Gross Income
- Total income less allowable deductions
- Valuation of Assets and Liabilities
- Fair Market Value
- Net Worth
- Assets-Liabilities=equity
- CD
- High interest rate, Fixed rate-if interest rates fall and still get your guaranteed return, Insured, lends itself well to an automated payroll deduction plan. Limited liquidity-penalties for early withdrawl, if interest rates rise your rate is locked in.
- Personal and Dependency Exemptions
- An IRS allowed reduction in your income before you compute your taxes. You are given one exemption for yourself, one for your spouse, and one for each dependent.
- Bank Credit Cards
- A credit card issued by a bank or large corporation, generally as a visa or Mastercard.
- MMDA
- Bank relatively attractive rate that varies with the current market rate of interest, limited checking privileges, insured, Disadvantage: high minimum balance, pays less that some other short-term investments such as CDs and money market mutual funds.
- Financial Planning
- an ongoing process-it changes as your financial situation and position in life change. 5 Steps: Evaluate Your Financial Health, Define Your financial Goals, Develop a Plan of Action, Implement your plan, review your progress
- Credit User
- if you run a balance
- Fair Credit Reporting
- If something is wrong you have right to get them to verify. Does not ding your credit. If they can't verify they have to take it off. Run credit every year. Right to one free credit report a year.
- Liabilities (Current and Long term)
- Things that you owe.
- Time Deposit
- Savings accounts
- Credit Bureau
- company that gathers information on consumers' financial history including how quickly they have paid bills and whether they have been delinquent on bills in the past. The company summarizes this information and sells it to customers.
- Variables Expenditures
- Expenses you have control over month to month
- Assets
- stuff you own that has mnetary value. Its put at fair market value. (what its worth today)
- On-line banking
- access to your accounts at banks or other financial institutions through your personal computer.
- AMA (Cash MGMT Acct)
- High return, automatic coordination of money mgmt, lends itself well to an automated payroll deduction plan. Costly mgmt fees: 25-200. Not insured, large minimum balance upward of $5000.
- Marginal Tax Rate
- the percentage of the last dollar you earn that goes toward taxes.
- Series EE Bonds
- Attractive interest rate that varies with current rates. Low denominations, can be purchased through payroll deduction or at most banks.
- Income
- Money coming in.
- Personal Income Statement
- a statement that tells you where your money has come from and where it has gone oversome period of time.
- W-2
- what tells you how much money or wage you make
- Record Keeping
- Financial Record Keeping, keeping track of spending, taxes, reciepts, W-2's, W-4's, Cable bills
- Financial Goals
- Cover three horizons: 1. Short term 2. Intermediate term. 3. Long term.
- Future Value
- The value of an investment at some future point of time.
- Filing status
- plays a major role in determining what you pay in the way of taxes. Akin to Marital Status
- Gross Pay
- Before taxes
- Filing Deadlines
- April 15 and the other extension dates
- Cashier's checks
- a check drawn on a banck or financial institution's account. These can be used by people with no checking account. Used when buying house, car, ect. Guarantees that the money is there.
- Grace Period
- length of time given to make a payment before interest is charged against the outstanding balance on a credit card.
- tax credits
- dollar for dollar off-set against taxes. education-credit
- Bankruptcy
- Most extreme case of debt. The inability to pay off your debts. Doesn't wipe out all your obligations but relieves some pressure. 1.Total Wipe-out, 2. Repayment plan