Personal Finance for 12th Grade

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What is the subject of the flashcard set?

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Personal Finance for 12th Grade

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What is a budget?

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A budget is a plan that outlines an individual's or organization's financial and spending goals, helping to manage income and expenses effectively.

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Why is saving important?

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Saving is important because it provides financial security, helps in achieving financial goals, and prepares for unexpected expenses or emergencies.

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What is the difference between a debit card and a credit card?

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A debit card allows you to spend money by drawing on funds you have deposited at the bank, while a credit card allows you to borrow money up to a certain limit to make purchases or withdraw cash.

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What is an emergency fund?

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An emergency fund is a savings account set aside to cover unexpected expenses or financial emergencies, such as medical bills or car repairs, providing a financial safety net.

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How can you improve your credit score?

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Improving your credit score can be achieved by paying bills on time, reducing debt, avoiding new hard inquiries, and maintaining a good credit utilization ratio.

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What is compound interest?

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Compound interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods, leading to exponential growth over time.

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What is a financial goal?

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A financial goal is a target or objective set to achieve specific financial outcomes, such as saving for retirement, buying a home, or paying off debt.

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How does inflation affect savings?

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Inflation reduces the purchasing power of money over time, meaning that the same amount of money will buy fewer goods and services in the future, thus affecting the real value of savings.

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What is a credit report?

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A credit report is a detailed record of an individual's credit history, including information about credit accounts, payment history, and inquiries, used by lenders to assess creditworthiness.