Personal Finance Vocabulary

What is gross income?

• The amount of money you take home and deposit into your account

• Money found on the street covered in dirt

• The amount of money after taxes are removed

• The amount of money you earn before taxes are removed

What is the definition of taxes?

• Optional payments made to the government

• Money paid to politicians

• Required payments to the government for roads, military, and local community benefit

• The government taking money for themselves

Define Net Income.

• Amount of money you take home after taxes are removed

• Amount of money before taxes are removed

• Amount of money paid to the government

Pay Yourself First refers to:

• Not paying taxes

• Spending all your money and hoping you can pay bills

• Actively removing 10-20% of your income and putting it in a savings account

• Buying the things you want first

What is saving?

• Spending your money

• Putting money on a credit card

• Giving money away

• Not spending your money

Define Opportunity Cost. (Remember the Laffy Taffy and Sweetart Example)

• The next best option when making a choice

• Combination of all the next options

• Money you owe the bank

What is insurance?

• Free service that gives you free money

• Government giving you money when you can't buy groceries and have no money.

• Risk management system that covers the cost of accidents when they happen

True or False: A credit card is a 'buy now, pay later' form of payment

• True

• False

When lenders lend money to borrowers, they charge an additional fee for the use of money. What is this fee called?

• Stock

• Debit

• Interest

• Loan