Personal Finance Flashcard

Front

What is insurance?

Back

A financial product used to protect against loss by assuming financial responsibility for unforeseen expenses.

Front

What are some examples of services funded by taxes?

Back

Schools, first responders, and roads.

Front

What does it mean to overdraw an account?

Back

To withdraw more money than is available in the account, resulting in a negative balance.

Front

How can a checking account help manage money?

Back

It allows users to easily check their transaction history and manage their finances.

Front

Which investment typically increases in value over time?

Back

Real estate.

Front

What is the purpose of a budget?

Back

To plan and track income and expenses to manage finances effectively.

Front

What is the difference between saving and investing?

Back

Saving is setting aside money for short-term needs, while investing is using money to purchase assets for long-term growth.

Front

What is a credit score?

Back

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

Front

What is the role of a financial advisor?

Back

To provide guidance on financial planning, investments, and wealth management.

Front

What is compound interest?

Back

Interest calculated on the initial principal and also on the accumulated interest from previous periods.