Deciding how to spend and save your money is not difficult, but when adults talk about spending and saving it might seem like they are speaking a foreign language. They throw around terms like “annual percentage rate” or “compound interest” and it all seems too complicated. However, once you learn what the terms mean, you will find spending, saving and investing your money is not so confusing after all.
The coins and dollar bills in your piggy bank are not the only types of money people have. Focus on these money terms so you can understand the different types of money or where someone’s money comes from.
Balance: The amount of money you have in your account or piggy bank.
Cash: All the coins and dollar bills you have.
Checks: Pieces of paper you fill out to transfer money from your bank account to someone else’s bank account.
Credit card: A plastic card with a set spending limit that allows you to purchase something and pay for it later.
Debit card: A plastic card tied directly to a checking or savings account, taking money from the account to make purchases.
Fill in the sentences with the appropriate term from the following word bank: Check, Debit card, Balance, Cash, Credit card.
(Answers are presented at the bottom of the page)
If you want to put your money somewhere safe, chances are you will open an account at the bank. Before you do that, however, you need to understand some key banking terms.
ATM: Automated teller machine, or a place to withdraw money from a bank.
Annual Percentage Rate (APR): The amount of interest (or extra money) paid on a loan or credit card each year.
Bank: A safe place to keep your money.
Checking Account: A place to keep your money at a bank. Money is withdrawn (or removed) by writing checks or using a debit card.
Deposit: Add money to a bank account.
Loan: Money given to someone by the bank that must be repaid with interest.
NSF: Non-sufficient funds or a lack of money in your bank account.
PIN: Personal Identification Number, a code used to access the money in your bank account through an ATM.
Savings Account: A place to keep your money at a bank. Money earns a small amount of interest as the balance builds.
Use the definitions above to help you answer the following questions:
Allowance: A regular amount of money given to you by someone, usually your parents.
Barter: Trade items for other items without spending any money.
Borrow: Temporarily use someone else’s money with the intent of paying it back.
Budget: A plan for your money, outlining where you will spend your money and how much money you have to spend in each area.
Debt: Money you owe.
Income: All the money you have to spend.
Interest: Money added over time to a debt you owe or to a balance in a savings account.
Savings Goal: The amount of money you hope to save within a specific period of time.
Match the scenario with the term it best relates to:
(Answers can be found at the bottom of the page)
Money terms: 1. Balance, 2. Debit card, 3. Check, 4. Credit card, 5. Cash
Banking terms: 1. Savings Account, 2. Deposit, 3. No, for your account security, keep it confidential, 4. 4% is better,
5. Ask the bank for a loan, 6. Use the ATM.
Spending and Saving terms: 1. Allowance, 2. Borrow, 3. Savings goal, 4. Barter, 5. Debt and interest, 6. Income