1. Personal Finance Economics

2. Income This is the money that you have earned or have been given each day, week, month, or year. Often, this refers to the money you earn for working, but can include money from a gift, money for selling things, or money for performing odd jobs; mowing grass, raking leaves, etc.

3. Savings Account A way to save money for a future want or need by placing a certain amount of money into the bank on a regular basis. Savings accounts often pay a small percent, often less than 1%, interest on the money that you put in the bank Ex: you put $100, you get 1% interest every month your money is in the bank, At the end of the month the bank adds a $1 to your savings. You now have $101 dollars. Next month they pay you 1% again. You now have $1.01 plus the 101 gives you $102.01.

4. Checking Account This type of account is useful for the money you will be spending soon. (Bills, movies, clothes, food, etc.) This account does not pay interest on the money in the account. You are given checks to use on this account, they work like cash. (Many people no longer use checks.)

5. Deposit This means to put money into your account, checking or savings.

6. Withdrawal This is when you take money out of an account.

7. Debt Money that is owed to someone or a company for a service they have provided to you. Credit cards are a form of debt. You purchase something with the card and the company that has given you the card pays for it with the understanding that you will repay them the purchase amount plus interest for borrowing the money from them. A house mortgage is also a form of debt.

8. Mortgage The money borrowed from a bank or lender to purchase a home. Most people use a mortgage because they do not have enough cash to purchase a home. When you borrow the money you agree to pay the principal amount plus interest, usually between 3-8%. The better your credit rating the lower your interest rate.

9. Credit Rating This is the score based on how well you pay your debt; credit cards, loans, mortgage, etc. This can range from 350-900. The closer to 900 the better. The higher the score the more likely that banks and lenders are to give you a loan. The higher the score the lower your interest rate.

10. Inflation This is the increase in the cost of living year- to-year. Cost of living would include the cost of food, gas, rent, clothing, etc. Ex: In the late 1980s, the cost of gas was between 90 cants and $1.00 per gallon of gas, it is now over $3.00. A 12 oz. can of soda was 50 cents, it is now between 75 cents and $1.00.

11. Loan Money borrowed from a bank or lender to purchase something or a service that you currently are unable to pay for. This would include; car loans, personal loans, mortgages, etc.

12. Investing Using excess money to prepare for the future. (Usually retirement) Investing can include putting money into a retirement fund through a company/job (401 k), IRAs, CDs, stocks, and bonds.

13. Stocks Purchasing a piece of a company through shares of stock. The price is set by the stock market. Yes, you can own a piece of McDonalds, Walmart, etc. (It’s usually a small piece.)

14. Overdraft This is when you use more money then you have in your checking account. To help with this, you can set-up overdraft protection on your account with the bank. Often the overdraft is set-up to take the money from your savings.

15. Interest A percentage that you pay to a bank, credit card company, or store for purchasing things on credit. (Credit – you are unable to pay for something but need the product or service now, you make payments over a set period of time to pay for the item or service.) Banks can pay you interest for keeping money in the bank. Some investments pay interest on your shares as well.

16. Debit Card This card is used like cash. It allows you to access your money from your checking and savings accounts. It can be used at an ATM (Automated Teller Machine) to get cash from your checking and savings, Usually a limit of $200 - $300 is allowed to be withdrawn in a day. It can be used in a store like a credit card, access to your checking account only when used this way. You are limited to the funds that are in your checking and savings account, if the money is not there, you can not make the purchase.

17. Credit Card A pre-approved loan (Card) that allows you to purchase things with money that you don’t have, must pay interest when paying the loan back

18. Retirement Funds Most companies offer some type of retirement; 401k, 403b, etc. You can also invest in stocks, bonds, mutual funds, CDs, and IRAs. Each of these offer different way to put money aside for a comfortable retirement. Often, the younger you are when you start investing, and the more you invest, the earlier you can retire.

19. Bill Something that is provided when a service has been performed. When you go to a restaurant you are given a bill before you leave. You will also get a bill from the phone company, electric company, gas company, cable TV company, etc. If you own a service company, then you will provide a bill to your clients.

20. How to fill out a check Your NameCheck Number AddressDate Phone Number Pay to the order ofWho’s the check for Write value of the check in word formvalue Memo What’s it forSignature Routing Number; Account number