Personal Finance Study Guide

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Interest
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The price of using credit. An additional amount that is paid to a lender
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Opportunity Cost
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The next-best alternative that is given up when a choice is made
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Credit
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A loan with interest
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Budget
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An estimate of income and expenses for a period of time
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Annual Percentage Rate (APR)
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The interest rate for one year
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Credit Limit
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The maximum amount of credit extended to you by a bank or credit card company
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Tax
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Money that is passed along to the government
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Net Pay
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The amount that a worker is paid after deductions are taken out
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Gross Pay
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The amount of pay a worker earns before deductions are taken out
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Check
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A written order directing a bank to pay money as instructed
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Variable Expenses
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Costs that vary from month to month
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Fixed Expenses
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Costs that are about the same amount each month
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Trade-Off
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A compromise. The exchange of one thing for another.
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Debit Card
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A card issued by a bank, tied to your checking account. Works like cash
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Gift Card
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A prepaid money card used like cash
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Credit Card
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Issued by a bank of credit card business allowing the holder to purchase goods or services on credit
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Income
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Money received on a regular basis for work
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Expense
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The money spent on something
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Savings
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Money put aside for later use
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Invest
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Putting money in a place where it will earn more money (increase, grow)

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