| A | B |
|---|
| Consumer | A person or organization that uses a product or service |
| Credit | The granting of a loan and the creation of debt, any form of deferred payment |
| Debt | An obligation of repayment owed by one part (the debtor/borrower) to a second party (creditor/lender) |
| Economy | A system by which goods and services are produced and distributed |
| Financial Literacy | The knowledge and skillset necessary to be an informed consumer and manage finances effectively |
| Interest | A fee paid by a borrower to the lender for the use of borrowed money. |
| Loan | A debt evidenced by a "note" which specifies the principal amount, interest rate and date of repayment. |
| Personal Finance | All of the decisions and activities of an individual or family regarding their money, including spending, saving, budgeting, etc |
| Compound Interest | Interest paid on interest previously earned. |
| Emergency Fund | Five hundred dollars in readily available chas to be used only in the event of an emergency. (The first foundation) |
| Interest Rate | Percentage paid to a lender for the use of borrowed money |
| Five Foundations | The five steps to financial freedom |
| Sinking Fund | Saving money over time for a large purchase |
| The First Foundation | Save a $500 EMERGENCY fund |
| The Second Foundation | Get out of DEBT |
| The Third Foundation | Pay CASH for your car |
| The Fourth Foundation | Pay cash for COLLEGE |
| The Fifth Foundation | Build WEALTH and GIVE |
| Inflation | The persistent increase in the cost of goods and services or the persistent decline in the purchasing power of money |
| Interest-Bearing Account | An account that generates interest income on the available balance in the account |
| Budget | A written cash flow plan |
| Cash Flow Statement | A summary that shows total income and spending for a given time period |
| Carbon Check | A copy of each check you write |
| Envelope System | Series of envelopes that are divided into catagories and are used to store cash for planned monthly expenses |
| Impulse Purchase | An item that is bought without previous planning or consideration of the long-term effects |
| Overdraft | Occurs when money is withdrawn from a bank account and the available balance goes below zero |
| Reconcile | To match your bank statement with your checkbook |
| Zero-Based Budget | A cash flow plan that assigns an expense to every dollar of your income, wherein the total income minus the total expenses equal zero |
