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Flash Cards: Check Comprehension

The Vocabulary:

Assume risk – Paying the full price if a financial loss occurs
Avoid risk – Not engaging in behavior that could cause a financial loss
Budget – An organized spending and savings plan whereby you match your expected income to your expected outflow
Cash flow – The total amount of money being transferred into or out of a business, account or an individual’s budget
Credit card – A card that authorizes the delivery of cash, goods or services for future payment with interest, according to a specific repayment schedule
Credit report – Confidential report on a consumer’s payment habits as reported by their creditors to a consumer credit reporting agency
Credit score – A statistical system used to rate credit applicants according to various characteristics relevant to creditworthiness
Debit card – A card, issued by a financial institution, that allows consumers to make purchases, withdrawals, or other types of electronic fund transfers directly from checking or savings accounts
Fixed expenses – Expenses that are the same each month
Flexible expenses – Expenditures that change each month and can be reduced or eliminated if necessary
Impulse buy – An unplanned decision to purchase retail merchandise on a whim or at the spur of the moment
IRA-individual retirement account – A retirement plan that allows workers to set aside money each year in tax-deferred savings
Needs – Items necessary to live, such as clothing, food and shelter
Overdraft – A expenditure (check or debit card) made without sufficient money in an account to cover it
Overdraft protection – A line of credit that allows you to spend more funds than your actual balance
PYF-pay yourself first – Putting money into savings each month (or each paycheck) before paying other bills
Reconcile – Comparing and adjusting the checkbook record to balance with the bank statement
Reduce risk – Taking steps to eliminate the likely possibility of financial loss
Risk – The probability of financial loss
Skimming – Criminals use a device that copies information from a credit or debit card’s magnetic strip in order to use the card illegally
Transfer risk – Paying a fee for another party to assume your financial loss
Wants – Items that are desired, but that are not needed to live