14 Chapter 14 Section 14.1 Everyday Financial Management Section 14.2 Manage Your Finances Chapter 14 Section 14.1 Everyday Financial Management Section 14.2 Use Credit Wisely 1

Section 14.1 Everyday Financial Management When you manage your finances responsibly, you think about your income, expenses, and taxes, as well as investing for your future. 2

Content Vocabulary Academic Vocabulary gross pay net pay deduction interest debit card reconcile compound interest insurance 401(k) plan invest diversify shares

Financial Fitness An essential part of becoming financially fit is to understand your paycheck and your bank accounts. Payment for work can be in the form of hourly wages, piecework, salary, and commission.

Financial Fitness Deductions will be taken from a paycheck for federal and state and local taxes, Social Security, Medicare, savings plans, and benefits. deduction Anything that is deducted from gross pay. 5

Income Taxes The biggest deduction is for federal income taxes. Tax forms can be downloaded and printed from the IRS web site. Have you ever filed a federal income tax return?

Bank Accounts Banking can be done through ATMs, checks, debit cards, automated services, by telephone, and online. Each month, it is important to reconcile your account, or check it for accuracy. debit card A card that deducts the cost of a purchase from the user’s bank account at the time of purchase. reconcile To compare accounts for accuracy.

Bank Accounts Banks pay you interest to use your money. Interest can be earned from compound interest and money market accounts. interest The fee the bank pays you for the opportunity to use your money. compound interest Interest that is calculated on the deposits you make and on the interest you have already earned.

Prepare for the Future Being financially prepared is not just saving. It also involves buying insurance, planning for retirement, and investing for the future. insurance Financial protection in the case of loss or harm. invest Using money to participate in a business enterprise that offers the possibility of profit.

Prepare for the Future Investing is a long-term view of your financial picture.

Prepare for the Future Investments bring certain risks, which can be avoided by following a few rules. Investment options include CDs, bonds, stocks, and mutual funds. What steps can you take now to help plan for your financial future?

Section 14.2 Use Credit Wisely There are different types of credit including cash loans, sales credit, and credit cards. Using credit has many financial advantages, but but it needs to be used wisely. 12

Content Vocabulary Academic Vocabulary credit creditor finance charge credit report credit rating annual percentage rate (APR) principal terms

Understand Credit Be responsible when using a credit card. Creditors expect you to pay back over a specified period of time for the money, goods, or services you purchase now. creditor Banks, finance companies, and stores that extend credit to consumers with the understanding that the loan will be paid back over a specified period of time.

Understand Credit Types of credit include credit cards, sales credit, or cash loans. Credit allows you to purchase expensive items and pay for them over time.

Understand Credit The biggest disadvantage of credit is its potential cost. Become creditworthy by establishing a credit history of paying debts in full and on time. Typical questions for applying for credit include your employment, housing, and financial history.

Choosing a Credit Card Understand the basic features of the various credit cards before choosing one. Compare fees and terms of credit cards, including the annual percentage rate, the credit limit, fees, grace period, and special features. annual percentage rate (APR) The annual rate of interest that a company charges you for using credit.

Use Credit Responsibly Set and follow rules about using credit. Be realistic about your spending. Save receipts to check on spending each month. Warning signs include worry about debt, spending more than you earn, maxing out your card limits, and using one card to pay another.

Chapter Summary Section 14.1 Everyday Financial Management Your financial fitness is determined by your ability to understand and manage your paycheck, bank accounts, income, and expenses. Your income is affected by how you are paid and by the deductions that are taken out of your paycheck.

Chapter Summary Section 14.1 Everyday Financial Management Managing your income is easier with bank accounts. Insurance is a way to protect your income and possessions.

Chapter Summary Section 14.2 Use Credit Wisely Banks and other organizations often extend credit to their customers. There are both advantages and disadvantages to using credit.

Chapter Summary Section 14.2 Use Credit Wisely It is important to choose the right card for your needs and to pay close attention to the terms and fees included in the agreement. Credit should be used responsibly to avoid debt, high fees, bad credit, and other financial problems.

Review Do you remember the vocabulary terms from this chapter? Use the following slides to check your knowledge of the definitions. The slides in this section include both English and Spanish terms and definitions. Start

gross pay ingresos brutos The total amount you earn. El total de los ingresos que recibes. Show Definition

net pay pago neto The amount of pay you receive after deductions. El salario que recibes después de las deducciones. Show Definition

interest interés A fee the bank pays you for the opportunity to use your money. Un monto que el banco te paga por la oportunidad de usar tu dinero. Show Definition

tarjeta de débito debit card A card that deducts the cost of a purchase from the user’s bank account at the time of purchase. Una tarjeta que deduce el costo de la compra de la cuenta del banco del usuario en el momento de la compra. Show Definition

reconciliar reconcile Compare accounts for accuracy. Comparar cuentas para verificar la precisión. Show Definition

compound interest interés compuesto Interest that is calculated on the deposits you make and on the interest you have already earned. Interés que se calcula sobre los depósitos que haces y los intereses que has ganado. Show Definition

seguro insurance Financial protection in the case of loss or harm. Protección financiera en caso de pérdida o daños. Show Definition

401(k) plan 401(k) A specific type of retirement plan offered by many companies. Un tipo específico de pensión para jubilados que varias compañías ofrecen.  Show Definition

invest invertir Using money to participate in a business enterprise that offers the possibility of profit. Usar dinero para participar en una iniciativa de negocios que ofrece la posibilidad de ganancias. Show Definition

Spread or increase variety. Ampliar o aumentar en variedad. diversify diversificar Spread or increase variety. Ampliar o aumentar en variedad. Show Definition

shares acciones Individual units of ownership. Unidades individuales de posesión.  Show Definition

credit crédito Money, goods, or services obtained now based on the promise to pay for them in the future. Dinero, bienes o servicios obtenidos ahora, basado en la promesa de que se pagarán en el futuro. Show Definition

creditor acreedor Banks, finance companies, and stores that extend credit to consumers with the understanding that the loan will be paid back over a specified period of time. Bancos, compañías financieras y tiendas que ofrecen crédito a los consumidores con el acuerdo de que el préstamo será pagado en un periodo de tiempo específico. Show Definition

finance charge cargo financiero Interest or an additional fee, such as a charge for a late payment. Interés o cuota adicional, como el cargo por pago tardío. Show Definition

credit report informe de crédito A record of a particular consumer’s transactions and payment patterns. Un registro de transacciones y de patrones de pago de un consumidor específico. Show Definition

credit rating rango crediticio An evaluation of a consumer’s credit history. Evaluación de la historia de crédito de un consumidor. Show Definition

tasa de porcentaje anual (APR) annual percentage rate (APR) The annual rate of interest that a company charges you for using credit. La tasa anual de interés que una compañía cobra por préstamos. Show Definition

principal The original loan amount borrowed. El monto original de un préstamo. Show Definition

términos terms Conditions. Condiciones. Show Definition

The Amazing World of Food End of End Of Chapter 14 Chapter 1 The Amazing World of Food