annual percentage rate (APR)
A rate that shows the total cost of credit annually. It includes a percentage of the principal as interest on a loan plus other costs (e.g., points on a mortgage loan, service charges).
assets
Anything of value owned by a person or business (can also include money owed to a person or business).
automated teller machine (ATM)
An ATM is a computer terminal activated by a magnetically encoded bank card, allowing consumers to make deposits, obtain cash from checking or savings accounts, pay bills, transfer money between accounts, and conduct other routine transactions as they would at a bank teller window.
automatic bill paying
A service which allows consumers to have bills paid automatically from their bank accounts (e.g., utility bills). Also known as direct debit, direct payment, or automatic debit.
balanced budget
A plan that shows the money coming in (income) is equal to the amount going out (expenses).
bank
An institution, chartered by the state or federal government, that takes deposits and provides credit and other financial services.
bank statement
A printed or online statement, usually available as a pdf, that provides the depositor with a record of deposits, checks, ATM transactions, and electronic fund transfers made to an account over a certain period of time.
basic banking account
New York State banking law requires that all banks in the state offer a low-cost transaction account. This account can be opened with $25 and has a small monthly fee that covers eight transactions per month without any additional charge.
bounced check
A check that a bank returns because it is not payable due to insufficient funds. Banks charge a fee for checks that are returned (see overdraft).
budget
A budget is both a spending plan and a list of spendable funds.
cash card
Card with a pre-paid value, read by a special cash card reader. The card is drawn down until the value is zero.
charitable giving
Providing a gift in the form of money or goods to a public or private nonprofit organization.
check
A written order to a bank to pay the amount specified from funds in your account. A certified check has been guaranteed by the bank upon which it is drawn and is so stamped.
Check 21
The Check Clearing for the 21st Century Act — legislation authorizing financial institutions to exchange images instead of paper checks. This law also allows for the creation of substitute checks or IRDs (Image Replacement Documents).
check fraud
Check fraud most frequently begins with a stolen check. It includes counterfeiting and forgery.
check register
A booklet for keeping a record of checking transactions such as deposits, withdrawals, debit card use, ATM withdrawals, checks written, and fees.
check-cashing fees
The rate a check-cashing business can charge for cashing checks. Many states, including New York, regulate the rates.
check-cashing industry
An industry founded in the 1930s that provides a link to the U.S. payments systems for consumers who elect not to deal with the banking system.
checking account
An account that allows the customer to write checks on the money in the account.
checking on a charity
The Better Business Bureau’s Wise Giving Alliance (www.give.org) evaluates whether national charities meet certain standards (i.e., program spending, fundraising, etc.).
credit union
Not-for-profit cooperative of members with some common bond who, in effect, save their money together and make low-cost loans to each other. A financial institution.
debit card
A card used for purchases that is issued by the consumer’s bank. Funds are deducted from the consumer’s checking account and transferred electronically to the merchant’s bank account when a purchase is made.
deficit
The insufficiency of revenues relative to outlays. Or the amount by which a sum of money falls short of the required amount.
deposit
A sum of money placed in an account in a financial institution. Also a sum payable as a first installment on a time-payment purchase or as a pledge for a contract.
depositor
A person or entity that puts money in a bank or other institution.
direct deposit
An automatic deposit of wages or benefits (such as payroll payments) into a consumer’s bank account. Direct deposit payments are processed through the Federal Reserve’s Automated Clearing House.
discretionary spending
Discretionary spending implies the buyer has a choice (for example, purchasing clothing or delaying a proposed purchase). See also nondiscretionary spending, below.
disposable income
The amount of income remaining after taxes and available for spending. This is the amount of money left after deductions (mandatory and nonmandatory) have been taken from gross pay.
electronic check
A form of payment made via the Internet that acts like a conventional paper check. Security features include authentication, public key cryptography, digital signatures, and encryption.
electronic funds transfer (EFT)
A variety of systems and technologies for transferring funds (money) electronically rather than by check. Includes Fedwire, Bankwire, automated clearinghouses (ACHs), and other automated systems.
emergency fund
Money set aside or budgeted for unanticipated but necessary expenditures.
endorse
To sign the back of a check, in order to cash it or specify another payee, who then can endorse and cash it. Some banks also require customers to include their bank account number as part of the endorsement.
Federal Deposit Insurance Corporation
An independent agency of the federal government that insures accounts up to $250,000 per depositor at almost all United States depository institutions. This deposit limit was increased from $100,000 by the FDIC in October, 2008, in response to the banking system crisis. The insured amount of $250,000 is effective through December 2009. The FDIC has primary federal supervisory authority over insured institutions that are not members of the Federal Reserve System.
financial institution
Banks (sometimes called commercial banks), credit unions, savings associations, savings and loans.
fixed expenses
Expenses that do not generally change from month to month (e.g., rent, car payment, health insurance, union dues, etc.).
goals
In terms of personal finances, any future plans or objectives that require specific financing, such as purchasing a house or paying college tuition.
insufficient funds
When a bank account does not have enough money to cover checks.
interest
An amount of money paid for using funds over a period of time, generally an annual percentage rate. Bank interest is both an amount paid to depositors of funds and a finance charge for money that is borrowed. The price that someone pays for the temporary use of someone else’s funds. Interest is also a compensation that someone receives for temporarily giving up the ability to spend money.
investment
Property or other possession acquired for future financial return or benefit; also a commitment of time (e.g., to education or training).
liability
Financial obligations or debt for which a person or organization is responsible.
money order
A means for safe transmission of sums of money. Resembling checks, they are issued by governments (usually postal authorities), banks, and other qualified institutions to buyers who pay the issuer the face amount of the money order plus a service charge. Money orders can be used for purchases throughout the world.
National Credit Union Administration
The NCUA is an independent federal agency that charters and supervises federal credit unions and insures savings in federal and most state-chartered credit unions across the country.
needs
Goods and services that an individual must have to survive; e.g., food, clothing, shelter.
net worth
Total assets minus total liabilities.
nondiscretionary spending
Nondiscretionary spending is for expenses over which one does not have control (e.g., income tax, mortgage payments, insurance). See discretionary spending, above.
occasional or periodic expenses
Expenditure of money that occurs from time to time, not on a regular basis.
online banking
Conducting bank transactions from a computer over the Internet.
opportunity costs
The cost of passing up the next best alternative when making a decision.
overdraft
A check written for amounts “over” what consumers have in their accounts (i.e., the checks are called overdrafts). Checks are returned unpaid and are usually said to “have bounced.” Some depositors select overdraft protection, which is a line of credit to write checks for more than the actual account balance. A draft or check written for an amount that exceeds the funds in the account on which the check is drawn. (Draft, in this sense, means a document for transferring money.)
payee
The business or person to whom a check is paid.
payer
The person or business that issues or pays a check.
Personal Identification Number (PIN)
A sequence of digits assigned to consumers for the purpose of identification when debit or credit cards are used at ATM and point-of-sale (POS) terminals or a home device.
profit
A financial gain, the excess of returns over expenditures, income over expenses. The opposite of loss.
reconcile
In banking terms this means cross-checking one’s bank statement against one’s own records to make sure they agree.
redlining
Illegal discrimination practiced by a lending institution, based on geographic area (and the race or income of its residents).
safe deposit box
A locked, secure box in the vault of a financial institution where an account holder’s valuable documents or items may be deposited.
savings account
An account at a financial institution that earns interest and allows regular deposits and withdrawals. The minimum required deposit, fees charged, and interest rate paid vary among providers.
savings bond
A certificate representing a debt. A U.S. savings bond is a loan by buyer to the government. The government agrees to repay the amount borrowed, with interest, to the bondholder.
scarcity
The basic economic situation — limited resources and unlimited wants.
store cash card
A prepaid, disposable, or reloadable card used for purchases in the specific store that issues it to the consumer, this includes gift cards.
substitute check
A paper reproduction of a check that has been copied electronically.
surplus
The amount by which revenue exceeds expenditure. Or the money left over after all expenses have been met.
trade-offs
Giving up one want in order to satisfy another.
variable expenses
Expenses that vary from month to month (e.g., auto repairs, utility bills, food, phone service, etc.).
wants
Goods and services that an individual would like to have (e.g., an upgraded computer, a sports car, dance training, etc.).
  1. 1Expenses
  2. 2Income & Savings
  3. 3 Budget review

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