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What is the 50/30/20 budgeting rule?
Answer: 50% needs, 30% wants, 20% savings
What is the time value of money?
Answer: The concept that money available now is worth more than the same amount in the future
What is an emergency fund?
Answer: Money saved for unexpected expenses
What is a credit score?
Answer: A number that represents your creditworthiness
What is a 401(k)?
Answer: A retirement savings plan sponsored by an employer
What is a bond?
Answer: A loan you make to a company or government that pays interest
What is the minimum payment trap with credit cards?
Answer: Paying only the minimum keeps you in debt longer due to accumulating interest
What is a secured credit card?
Answer: A credit card backed by a cash deposit you make as collateral
What is compound interest?
Answer: Interest earned on both the principal and previously earned interest
What is the Rule of 72?
Answer: A formula to estimate how long it takes money to double at a given interest rate
What is a tax refund?
Answer: Money returned to you because you paid more taxes than you owed
What is a credit utilization ratio?
Answer: The percentage of your available credit that you're using
What is supply and demand?
Answer: An economic model where prices are determined by availability and desire for goods
What is a Roth IRA?
Answer: A retirement account where contributions are taxed now but withdrawals are tax-free
What is the purpose of insurance?
Answer: To protect against financial loss from unexpected events
What is the best way to pay off multiple debts?
Answer: Pay minimum on all debts and extra on the highest-interest debt first
What is net income?
Answer: Your income after taxes and deductions are taken out
What does it mean to 'pay yourself first'?
Answer: Save money before spending on anything else
What is a W-2 form?
Answer: A tax form showing your annual wages and taxes withheld
What is a mutual fund?
Answer: A pool of money from many investors used to buy a diverse portfolio
What is diversification in investing?
Answer: Spreading investments across different assets to reduce risk
What is a budget?
Answer: A plan for how you will spend and save your money
What does APR stand for?
Answer: Annual Percentage Rate
What is the difference between a need and a want?
Answer: Needs are essential for survival; wants are things you desire but can live without
What is identity theft?
Answer: When someone steals your personal information to commit fraud
What is a deductible in insurance?
Answer: The amount you pay out-of-pocket before insurance coverage kicks in
What is inflation?
Answer: The rate at which prices for goods and services rise over time
What is a stock?
Answer: A share of ownership in a company
What is opportunity cost?
Answer: The value of the next best alternative you give up when making a choice
What is gross income?
Answer: Your total earnings before any deductions or taxes