Personal Finance Vocabulary Flashcard

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What is an Asset?

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An asset is anything of value or a resource owned by an individual or entity that can provide future economic benefits.

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What is a Liability?

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A liability is a financial obligation or debt that an individual or entity owes to another party.

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What is Gross Income?

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Gross income is the total amount of money earned before any deductions or taxes are taken out.

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What is Net Income?

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Net income is the total amount of money earned after all deductions, taxes, and expenses have been subtracted.

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What is a Tax Return?

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A tax return is a form filed with the government to report income, expenses, and other tax information.

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What is Revolving Credit?

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Revolving credit is a type of credit that allows borrowers to repeatedly borrow against a credit line and pay it off without applying for a new loan.

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What is a Credit Score?

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A credit score is a numerical representation of a person's creditworthiness, based on their credit history.

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What is a Budget?

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A budget is a financial plan that outlines expected income and expenses over a specific period.

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What is Interest?

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Interest is the cost of borrowing money, usually expressed as a percentage of the amount borrowed.

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What is a Mortgage?

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A mortgage is a loan specifically used to purchase real estate, where the property serves as collateral.