FBLA - Financial Literacy Questions and Answers

FBLA - Financial Literacy Questions and Answers Property Tax Paid usually once a year as long as I own it; not taken from paycheck. Is for car, house, land, boat, etc. Payroll Tax Tax on wages and salaries to finance Social Security and Medicare costs. Sales Tax Tax on a sale of goods or services, paid at that time. Income Tax Money that wage earners pay the government to run the country. The amount of the tax depends upon how much I earn. Tax Money paid to the government in exchange for services, like roads, bridges, and police protection. Gross Income Income before taxes Net Income Income after payroll taxes, the money I REALLY have for my budget Expenses An expense is an outflow of money to another person or store or other group to pay for goods or service. Balance How much money I have left. Budget A plan for saving and spending my money, with the goal of meeting my financial goals (like buying a game, a car when I'm 18, going to college). Financial Institutions Keeps money safe; and loans money on which you will have to pay interest or pays you money for your savings account. Credit Card Can be issued by a bank or other business, and, when used, I get something now. It charges the amount to my account. BUT then I have to pay interest, too. Debit Card Automatically subtracts the amount of a purchase from my checking account. Needs a PIN #. Easier to carry than cash, and I'm less likely to overspend. Cash Dollars and Cents Checks Papers in a booklet that I can use to pay for things and the money is taken out of my checking account. Interest The price paid or earned for using assets. Asset Anything of value this is owned. CD Certificate of Deposit Savings The portion of income not spent on current expenditures. Interest Rate The percentage rate that determines the amount of interest earned. Check a written document telling the financial institution to pay a specific amount of money from your account to a specific person or organization Credit Card a card that can be used to borrow money from financial institutions, stores, or other businesses in order to buy products and services on credit Debit Card a card that is linked to your checking account so that a person can withdraw money, make deposits, or make purchases at a store Electronic Payment payments using security features on the Internet Expense payment for goods and services Financial Records a formal record of the transactions made by a person, business, or other organization Gross Income the total amount of personal income prior to taxes and deductions Income money earned or received Income Tax money paid on the earned wages of an individual or business for the federal and/or state governments as required by law Net Income the income that remains after taxes and other deductions are taken from an individual's gross income Payroll Tax the amount of money that a company withholds from its employees for the federal government as required by law Property Tax the amount of money collected on the value of a property for the local government as required by law