Personal Finance Cheat Sheet-541

funnyguy541's version from 2016-12-22 19:23

Section 1

Question Answer
AssetItem of economic value
LiabilityMoney or debt that you owe someone such as loan or bill
IncomeMoney in
ExpenseMoney out-Food, Home, Clothing
Borrow debt or loanReceive Something of value and promise to give back at somepoint in future
MortgageA loan to finance the purchase of real estate
Creditor or LenderAn individual or organization that is owed money or other item of value. The borrower is often called the debtor
PrincipalThe amount borrowed
IterestThe fee charged to a borrower by a lender, Sometimes referred to as prime rate for a bank loan and coupon rate for a bond
DefaultFailing to meet a financial obligation
Rent or LeaseAn agreement to pay for the use of an asset
BudgetA list of estimated expenditures and the expected ways to pay for them
AppreciationAn increase in value of an item
DepreciationA decrease in value of an item
Foreign Exhange Rate Valur of countrys currency compared to another country's currency
Financial MarketA market that faciliates the buying and selling of financial securities such as stocks, bonds, mutual funds, and precious metals

Section 2

Question Answer
CreditSimiliar to debt or loan. Capacity to borrow. A refund or reduction in what you owe
Credit CardCard that can be used to borrow money or make purchases
Line of creditA pre-authorized loan with your bank or financial institution that you can access as needed
Revolving CreditDebt arrangement that allows you to borrow and repay and then borrow again
Credit HistoryPast record of making good payments on your liabilities.
Credit RatingCapacity to borrow, often expressed as a score.

Section 3

Question Answer
Four thing you can do with money?Spend, Store, Invest, or Gamble
Saving and Debt investmentsDepositing money in a bank savings account is lending your money to the bank. Similarly, purchasing a bond is lending money to the bond issuer. Type of return: Interest or Discount on Face value
Equity InvestmentsStocks, Mutual Funds, Commodities, Precious Metals, Derivatives and capital assets such as real estate or other arts and collectibles. Type of return: Dividend or Capital Gain
Qualified Retirement PlansAllow you to make certain investments while deferring income tax due

Section 4

Question Answer
Consumption TaxSuch as sales tax, levied on goods and services when you purchase
Income taxassesed on your earnings. Capital Gains tax arises from the sale of your assets
Wealth TaxBased upon net worth
Extra-InsuranceContract or policy that protects against financial loss. Common types are life, health, automobile and property

Section 5

Question Answer
Account TypesCheckings and Savings. Access accounts via bank brances atms, internet, and phone
Debit CardProvides access to your bank accounts and can be used to make purchases. Pin-Personal Identification Number. (Password) used to access debit card
Non-Sufficent FundsOccurs when you write a check but do not have sufficent funds in your account to cover the amount
Overdraft ProtectionA feature offered with checking accounts where your bamk will honor checks you write even if your account has insufficent funds
Deposit InsuranceFederal government guarantees your bank savings (up to a certain amount) in the event of bank bankruptcy.
Extra-- RetirementThe time in life where you no longer work to generate income

Section 6

Question Answer
How to get net worth equationNet Worth= Assets - Liabilities
How to get cash flow equationCash Flow=Income-Expenses