Personal Finance Study Guide

Interest
The price of using credit. An additional amount that is paid to a lender
Opportunity Cost
The next-best alternative that is given up when a choice is made
Credit
A loan with interest
Budget
An estimate of income and expenses for a period of time
Annual Percentage Rate (APR)
The interest rate for one year
Credit Limit
The maximum amount of credit extended to you by a bank or credit card company
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Tax
Money that is passed along to the government
Net Pay
The amount that a worker is paid after deductions are taken out
Gross Pay
The amount of pay a worker earns before deductions are taken out
Check
A written order directing a bank to pay money as instructed
Variable Expenses
Costs that vary from month to month
Fixed Expenses
Costs that are about the same amount each month
Trade-Off
A compromise. The exchange of one thing for another.
Debit Card
A card issued by a bank, tied to your checking account. Works like cash
Gift Card
A prepaid money card used like cash
Credit Card
Issued by a bank of credit card business allowing the holder to purchase goods or services on credit
Income
Money received on a regular basis for work
Expense
The money spent on something
Savings
Money put aside for later use
Invest
Putting money in a place where it will earn more money (increase, grow)