Personal Finance Chapter 10

Short-term needs

Expenses beyond your regular monthly items.

Long-term needs

Expenses that are costly and require years of planning and saving.

Scholarships

Cash allowances awarded to students to help pay education costs.

Student Loans

Money borrowed for your education.

Loan Consolidation

Combining all your student loans into one large loan, resulting in one monthly payment.

Grants

Educational funding that does not have to be repaid.

Work Study

Students work on campus to earn money toward their tuition.

Principal

Amount of money you deposit into a savings account.

Interest

Earnings on principal.

Annual Percentage Yield (APY)

The actual interest rate an account pays, stated on a yearly basis.

Liquidity

Measure of how quickly you can get your cash without loss of value.

Certificate of Deposit

Deposit that earns a fixed interest rate for a specified length of time.

Maturity Date

Date on which an investment becomes due for payment.

Money Market Account

Type of savings account that offers a more competitive interest rate than a regular savings account.

Safety of Principal

The guarantee that you will not lose your savings deposit even if the financial institution fails.

Direct Deposit

Your net pay is deposited directly into your bank account.

Automatic Deductions

Money you have authorized your bank to move from one account to another at regular intervals.

Payroll Savings Plan

You authorize your employer to make automatic deductions from your paycheck each pay period.