Chapter 1 Personal Finance Vocabulary

Personal finance is all the financial decisions an individual or family

must make in order to earn, budget, save, spend, and give money over time.

• True

• False

A person or organization that uses a product or service.

• Accountant

• Economist

• Consumer

• Financial Advisor

Debt is....

• Money owed to you.

• Money owed to another person or company.

• Money in your savings account.

• good to have.

An expression used to describe a person or household whose monthly income is devoted

to expenses and has little to no savings.

• Debt free

• paycheck to paycheck

• financially responsible

• consumer debt

Credit is the granting of a loan and the creation of debt;

any form of deferred payment.

• False

• True

Prior to 1920, the only way for banks to make money by loaning money was to charge sky-high ________.

• credit

• debt

• interest rates

What is a loan shark?

• person or entity that charges borrowers interest rates above an established legal rate

• a shark that has been caught at sea but you have to throw it back after you catch it; catch and release

• credit card companies that will eat you alive

What is the additional cost a lender charges for borrowing their money called?

• assets

• interest

• dividends

• fees

Your financial plan will guide your _____ decisions.

Net worth is the .....

• amount by which the value of a person's assets exceeds or falls behind the value of their liabilities.

• financial debt or obligations

• anything owned by an individual