Chapter Review PDF

chapter review. budgeting: the process of calculating how much money you must earn or save during a particular period of time, and of planning how you will spend it income: The payment people receive for providing resources in the market. net pay: is take-home pay; after taxes. Disposable income: is...

chapter review. budgeting: the process of calculating how much money you must earn or save during a particular period of time, and of planning how you will spend it income: The payment people receive for providing resources in the market. net pay: is take-home pay; after taxes. Disposable income: is total personal income minus current regular expenses. A tax deduction: is a provision that reduces taxable income. Federal Income Contributions Act: The FICA tax is a U.S. payroll tax used to fund Social Security (6.2) and medicare. Income tax – A tax on the amount of income people earn. state income tax is a direct tax levied by a state on income earned in or from the state. tax: Taxes are government fees on business and individual income, activities, products, and property that people are required to pay. Progressive Taxes – Take a larger percentage of income from high income taxpayers. The Economic Policy Institute indicates the annual cost of living for a single person without any children. Postsecondary is any education option after high school. An interest inventory is a testing instrument designed for the purpose of measuring and evaluating the level of an individual's interest in, or preference for, a variety of activities. Fill out the FAFSA, Search for scholarships, Choose an affordable school, Use grants if you qualify, Get a work-study job, Work for an employer that pays for college,Take out federal loans if you have to. collateral: something pledged as security for repayment of a loan, to be forfeited in the event of a default. A commercial bank is a financial institution which accepts deposits from the public and gives loans for the purposes of consumption and investment to make profit. A credit union is a member-owned nonprofit cooperative financial institution. A checking account is a deposit account that allows you to easily make withdrawals, deposits, and fund transfers. make sure you have a good balance to cover fees. A Savings Account, by definition, allows you to deposit your money safely with the bank. FDIC protects your money in the unlikely event of a bank failure. ensures 250k market liquidity is a market's feature whereby an individual or firm can quickly purchase or sell an asset without causing a drastic change in the asset's price. liquid money (cash) non-banking financial institution or non-bank financial company is a financial institution that is not legally a bank; finance company, specialized financial institution that supplies credit for the purchase of consumer goods and services by purchasing the time-sales contracts of merchants or by granting small loans directly to consumers. Investment bank: bank that provides financial services for corporate and institutional customers, such as investing and raising capital and arranging mergers and acquisitions. savings are usually 5 years, anything over is an investment. low interest rates. credit card: ensures coverage incase of mishaps. car insurances. uninsured motor coverage: an add-on coverage for auto policies that will pay for injuries and damages caused by an uninsured driver underinsured motor coverage: protects you if you're hit by a driver who doesn't have enough coverage to pay for the damages or injuries they caused. money market accounts: Pay a slightly higher interest rate than regular savings accounts, federally insured. Cd: Pay a higher rate of interest because they require you to commit your money for a specific period of time. 30 days - 10 years. bonds: A bond is a certificate of debt or obligation by a corporation or government. safest investment. Individual Retirement Accounts (IRA) provide tax advantages for retirement savings. 3cs of credit. credit companies seek: low card users, ability to repay debt and authorized users. 3cs: capacity, collateral, character comparison shopping is comparing similar products from different stores or suppliers. Credit monitoring is a way to stay apprised of changes to your credit reports so you can address suspicious activity. In an amortization schedule, you can see how much money you pay in principal and interest over time. Usually shown in a book or graph form Medicare is federal health insurance for people 65 or older, some younger people with disabilities, people with End-Stage Renal Disease.