Basic Financial Literacy Terms

Transfer Payments

• A one-way payment of money for which no service or good is exchanged.

• A payment made in exchange for goods or services.

• A payment that requires a return service or good.

• A payment made to support a specific project or initiative.

Fixed Income

• The same amount of money is earned at set intervals, such as monthly or quarterly.

• Income that varies based on market conditions.

• Income that is only earned annually.

• Income that is dependent on the performance of stocks.

Withdrawals

• Moving money from an account to pay expenses, transfer to other accounts, withdraw cash from an ATM, or make purchases.

• Depositing money into an account for future use.

• Transferring funds between different currencies.

• Investing money in stocks or bonds.

Capital Gain

• Profit made from an investment.

• Loss incurred from an investment.

• Revenue generated from sales.

• Interest earned on savings.

Itemization

• A general overview of a topic.

• A specific listing of individual pieces or units of information.

• A summary of key points.

• A detailed explanation of a concept.

Variable Income

• The amount of money earned is the same each pay period.

• The amount of money earned is not the same each pay period.

• The amount of money earned is guaranteed to increase every pay period.

• The amount of money earned is fixed regardless of hours worked.

Take-home Pay

• The total amount earned before any deductions.

• The amount of a paycheck one gets to keep after taxes and other deductions are taken out.

• The amount deducted for retirement savings.

• The gross income before taxes are applied.

Opening Balance

• The balance of an account on the current month’s statement, which was used as the ending or closing balance in the previous month’s statement.

• The total amount of money that a business has at the beginning of the fiscal year.

• The amount of money that is available for withdrawal at any given time.

• The difference between total assets and total liabilities at the end of the month.

Checkbook Register

• Log of deposits and withdrawals from a checking account.

• A record of all credit card transactions.

• A summary of monthly bank statements.

• A list of all outstanding checks.

Fixed Expense

• A bill that varies each month.

• A one-time payment for a service.

• A bill, such as monthly rent, that is the same each month.

• An expense that is not necessary.