Notes on Vocab Lesson

A budget is a financial plans lists all expenses going out and income coming in, you need to have more money coming in, then going out.

• True

• False

Answer explanation

Financial plan that lists all expenses going out and income coming in, you

need to have more money coming in, then going out.

if you don’t have enough money to balance your budget, then you either need to cut expenses or find a new/another job

 You pay someone to live somewhere and you don’t own the property, someone else owns the property-you just live there and pay them.

• Rent

• Own

Answer explanation

You pay someone to live somewhere and you don’t own the property, someone else owns the property-you just live there and pay them.

You can rent a house or an apartment (monthly).

Usually sign a 1 year lease (agreement that you’ll live there for a year and pay every month-usually the 1st of the month rent is due).

Nicer areas cost more to rent, then other areas for example, living close to golf course or metro parks, downtown

• True

• False

Answer explanation

Nicer areas cost more to rent, then other areas (living close to golf course or metro parks, downtown etc).

Finance is defined as the management of money and includes activities such as investing, borrowing, lending, budgeting, saving, and forecasting.

• True

• False

Answer explanation

Finance is defined as the management of money and includes activities such as investing, borrowing, lending, budgeting, saving, and forecasting.

You either need to pay this or receive this.

• Interset

• Finance

Answer explanation

 Interest: you either need to pay interest or receive interest.

When you invest, you receive interest on your money (receive extra money).

When you borrow money, you need to pay interest (pay extra money)

Credit Score does not effect your credit score.

• True

• False

Answer explanation

Interest rate:  percentage of interest (extra you pay) on money you borrow or

percentage of interest you receive from investments (retirement or savings).

Credit score is the number given to a person for being financially responsible. 

• False

• True

Answer explanation

Credit score:  number given to a person for being financially responsible. This

number determines your interest rate available to you.

Probably the most important part of this Financial Unit.

A debit card is a card is tied to a loan.

• True

• False

Answer explanation

Debit Card:  This card is tied to your savings or checking account. 

The money has to be there in order to use it.  

The money is directly taken out of your account.

A Credit Card is a card that is tied to the bank or company, it’s like a loan which you have to pay back with interest-normally at a high interest rate.

• True

• False

Answer explanation

Credit Card:  This card is tied to the bank or company, it’s like a loan which you have to pay back with interest-normally at a high interest rate.

A fee that the bank or company charges if your payment is not received on time.

• Late Payment

• Retirement

Answer explanation

Late payment: fee that the bank or company charges if your payment is not received on time (ie the date the payment is due), normally companies will allow for a few “grace periods/days” before the late payment goes into effect.  

Not all companies/banks are the same (ie how many grace days they have).