Term
click below
click below
Term
Normal Size Small Size show me how
baby steps/Chap 1
Term | Definition |
---|---|
Step 1 | $1,000.00 in an “Emergency Fund” ($500.00 if income under 20k per year) |
Step 2 | Pay-off all debt utilizing the “Debt Snowball” – except the house |
Step 3 | 3-6 months expenses in savings |
Step 4 | Invest 15% of household income into Roth IRA’s and pre-tax retirement |
Step 5 | College Funding |
Step 6 | Pay-off home early |
Step 7 | Build Wealth! (Mutual Funs/ Real Estate) |
amoral | neither good nor bad |
baby steps | steps to a healthy financial plan |
compound interest | interest paid on interest earned. [interest credited daily, monthly, quarterly, semi-annually, or annually on both principal and previously credited interest] |
discipline | the key to wealth building you must be consistent over time |
emergency fund | three to six months of expenses in readily available cash |
interest rate | percentage paid to a lender for the use of borrowed money |
money market | mutual fund that seeks to maintain a stable share price and to earn current income by investing in interest-bearing instruments with short-term (usually 90 days or less) maturities. emergency fund goes here |
Murphy’s Law | if it can go wrong, it will; unexpected events |
Pre-authorized checking (PACs) | system of automatic payment processing by which bills, deposits, and payments are handled electronically at regular intervals or on predetermined schedule. Checking that is authorized by a payer in advance written either by the payee or by the payee’s ba |
Priority | level of high importance or great urgency |
Savings account | accounts at financial institutions that allow regular deposits and withdrawals. The minimum required deposit, fees charged, ad interest rate paid varies among providers |
sinking fund | saving money to allow interest to work for you rather than against you |