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Questions and Answers
What is the purpose of a budget?
Gross income is the money remaining after all bills and expenses are paid.
False
What is a credit union?
A non-profit financial institution owned by its members.
A _____ card allows you to spend money directly from your bank account.
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Match the following terms with their definitions:
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Study Notes
Personal Finance Vocabulary
- Budget: A strategic plan for managing income and expenditures effectively to ensure financial health.
- Gross Income: The total earnings before deductions such as taxes and bills; a critical component in understanding overall financial standing.
- Net Income: The remaining amount of money after all expenses and obligations have been settled, reflecting actual disposable income.
- Bank: A financial institution that safely receives deposits, keeps funds secure, and provides loans to individuals and businesses.
- Credit Union: A non-profit financial cooperative owned by its members, offering similar services as banks but often with lower fees and better rates.
- Debit Card: A payment card linked to a bank account that withdraws funds directly for transactions, promoting more mindful spending.
- Credit: The ability to purchase goods or services with the agreement of future payment, relying on the buyer's perceived reliability.
- Credit Card: A plastic card enabling users to borrow funds for purchases, which are repaid later, often with interest fees.
- Credit Report: A detailed document summarizing an individual's borrowing and repayment history, crucial for assessing creditworthiness.
- Credit Score: A numerical expression, typically ranging from 300 to 850, representing an individual's credit risk based on their credit behavior; higher scores indicate better payment reliability.
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Description
Test your knowledge of essential personal finance terms. This quiz covers key vocabulary such as budget, gross income, net income, and more. It’s perfect for anyone looking to improve their financial literacy.
