| A | B |
|---|
| 70-20-10 rule | 70% of the money can be spent, 20% should be saved, and 10% should be invested. |
| Cash management | The daily routine of handling money to take care of an individual’s or family’s needs |
| Cash management tool | A financial account used to assist with daily cash management |
| Certificate of deposit | An insured interest earning savings instrument with restricted access to the funds |
| Checking account | A tool used to transfer funds deposited into the account to make a cash purchase |
| Compounding interest | Earning interest on interest. |
| Fixed interest rate | The interest rate will not change for the lifetime of the investment. |
| Future value | The value of an asset projected to the end of a particular time period. |
| Interest | Price of money. |
| Interest rate | Percentage rate paid on the money saved or invested expressed as an annual percentage |
| Inflation | Steady rise in the general level of prices. |
| Investing | The purchase of assets with the goal of increasing future income. |
| Liquidity | The speed and ease with which an asset can be converted into cash. |
| Pay Yourself First | Taking out a portion of a paycheck for saving or investing before spending the check |
| Present value | The current value of an asset received in the future. |
| Principal | The original amount of money invested or saved. |
| Rate of return | Annual return on an investment including appreciation and dividends or interest |
| Risk | Uncertainty the yield on an investment will deviate from what is expected. |
| Saving | The portion of current income not spent on consumption |
| Savings account | An account to hold money not spent on consumption |
| Savings bond | A discount bond purchased for 50% of the face value from the U.S. Government |
| Savings plan | A strategy for putting a portion of money from current income aside |
| Simple interest | Interest earned on the principal (original) investment |
| Tax-deferred | Taxes will not be paid until a person takes the money out of the investment |
| Taxes | Compulsory charges imposed by the federal government on its citizens and their property |
| Tiered interest rate | The amount of interest earned depends on the account balance. |
