Unit 3 Vocabulary

Section 3.1 Vocabulary:

Financial Freedom

The ability to make choices without financial constraints 

i.e. Being able to go on vacations where ever you want without worrying about money

How far are you in your understanding? I can:

1.0: Write a factual statement (not definition) concerning financial freedom.

2.0: In your own word (not the teacher's), define financial freedom.

3.0: Identify a choice that hurts your ability to be financially free.  

4.0: Explain why you think (opinion) most Americans are not Financially Free. Research your opinion and provide evidence from what you find to back up your opinion.  

Residual (income):

Money earned continuously for one task...

Ex.If you write a book every time someone buys that book you get paid. 

How far are you in your understanding? I can:

1.0: Write a factual statement (not definition) concerning residual income.

2.0: In your own word (not the teacher's), define residual income.

3.0: Tell the difference between the goods and services provided by residual income as compared to the goods and services provided by salaried and wage jobs.

4.0: Describe 3 ways to earn residual income.  

Commission:

Money earned upon the completion of a sale of a good or service

How far are you in your understanding? I can:

1.0: Write a factual statement (not definition) concerning commission.

2.0: In your own word (not the teacher's), define commission.

3.0: Name three jobs where people are typically relying on commission.

4.0: List 2 positives and 2 negatives to earning money through commission. Write a sentence comparing these. Write one sentence explaining your reasoning for whether or not you would like to be paid based off commission.  

Assets 

A good owned that has $ (monetary) value

i.e. Headphones, Jewelry, phones; etc.

How far are you in your understanding? I can:

1.0: Write a factual statement (not definition) concerning assets.

2.0: In your own word (not the teacher's), define assets.

3.0: Name three assets that I have.

4.0: Provide a scenario of someone who has more assets than liabilities. Provide a scenario of someone who has more liabilities than assets. Describe who you would rather be and why.  

Deduction

Money withheld from a paycheck to pay for income taxes, insurances, and retirement funds.

i.e.

Video: https://www.youtube.com/watch?v=XQ0f87stf_o

Podcast:

How far are you in your understanding? I can:

1.0: Write a factual statement (not definition) concerning a deduction.

2.0: In your own word (not the teacher's), define deduction.

3.0:  Classify, in order, the top 5 most common paycheck deductions.

4.0:  Research 2 other types of deductions.  Why are these important in your paycheck? 

Garnishment

 A court order for an employer to hold back income to repay a debt.

Podcast (8 minutes)

How far are you in your understanding? I can:

1.0: Write a factual statement (not definition) concerning a garnishment.

2.0: In your own word (not the teacher's), define garnishment.

3.0:  Identify the three most common reasons garnishment happens.

4.0:  Explain the process of garnishment using one common reason from 3.0 answer.

Repossession

The return of an asset that was used to get a secured loan (a loan guaranteed by an asset), because repayment was not occurring

How far are you in your understanding? I can:

1.0: Write a factual statement (not definition) concerning a repossession.

2.0: In your own word (not the teacher's), define repossession.

3.0: Why do you feel consumers make decisions that lead to repossession compared to making decisions based on patience? Explain.

4.0: Research what protections there are for consumers against aggressive car loans in the state of Nebraska? Give an example. (Help)

Liabilities

An asset that is responsible for a debt. 

i.e. A car is a liability when there is a loan that the car is responsible for creating

Podcast:

How far are you in your understanding? I can:

1.0: Write a factual statement (not definition) concerning a liability

2.0: In your own word (not the teacher's), define liabilities.

3.0: Decide if an individual is considered an economic liability.

4.0: How can you avoid having more liabilities than assets?  Write a paragraph explaining your answer with detail.  (Try to include terms from 6th grade's Unit 2.1)

Section 3.2 Vocabulary:

Risk

Exposure to the chance of loss

i.e. ASTAR A- accept, S- share, T- transfer, A- avoid, R- reducing.

EQ: How does insurance handle risk? Explain.

Fact 1: A lot of everyday things we do are risks we take.

Fact 2: Another way to remember the 5 ways of risk or how Mrs. Sebrants class remembers it is ARRTS A- avoid R- reduce R- retain T- transfer S- share.

How far are you in your understanding? I can:

1.0: Write a factual statement (not definition) concerning a risk.

2.0: In your own word (not the teacher's), define risk.

3.0: Give an example for each of the 5 ways we handle risk (avoidance, acceptance, share and reduce and transfer)

4.0: Give a financial example for how consumers use each method of risk in the real world.

Insurance

A contract that shares the risk of loss to assets

i.e. Life insurance for someone's death

EQ: How is insurance similar to the lottery?

Fact 1: There are 3 certain types that are required. Those 3 types are Health, House/Mortgage and Car - liability insurance.

Fact 2: Anyone who has health insurance is pretty much paying for other people, mainly because of Obama Care.

How far are you in your understanding? I can:

1.0: Write a factual statement (not definition) concerning insurance.

2.0: In your own word (not the teacher's), define insurance.

3.0: Describe the process of insurance by using the pictures we drew to represent inurance.

4.0: What are 5 insurances that would be wise to have as a college student? Why?

Premium

Money paid for insurance

i.e. Monthly payment for life insurance

Fact 1: A Yearly renewable life insurance makes it so premiums start small then get bigger/more expensive, over time.

Fact 2: Where a level term life insurance stays the same no matter what.

How far are you in your understanding? I can:

1.0: Write a factual statement (not definition) concerning a premium.

2.0: In your own word (not the teacher's), define premium.

3.0: Identify what causes a premium to increase.

4.0:  Discuss how a person would choose between a higher deductible and lower deductible.  Please give 2-3 reasons for both types of deductible.  

Claim

A request for money to cover a loss

i.e. A family member dies, and you ask your insurance for money.

Fact 1: Claim is a multiple meaning word.

Fact 2: You mainly only file a claim after an accident, fire, or death.

How far are you in your understanding? I can:

1.0: Write a factual statement (not definition) concerning a claim.

2.0: In your own word (not the teacher's), define claim.

3.0: Determine why an insurance company might not pay a claim.

4.0:  What claims are covered by comprehensive insurance, collision insurance and homeowners insurance.  

Liability Insurance

Responsibility to pay for damages you cause with your vehicle

i.e. You run into a lamp post, you will have to pay for the repair of the lamp post

Fact 1: This auto insurance is required by law.

Fact 2: There are other types of auto insurance such as No-Fault, Collision, and Comprehensive.

How far are you in your understanding? I can:

1.0: Write a factual statement (not definition) concerning liability insurance.

2.0: In your own word (not the teacher's), define liability insurance.

3.0: Determine what happens if I cause an accident and have no liability insurance.

4.0:  Are there other types of liability insurance besides for your vehicle?  If so, please explain each type and how it would benefit you.  

Deductible

The amount of money you agree to pay for a loss before a claim is paid

i.e. Your deductible could be $1,000, and to pay for $2,000 dollar damages you would pay half.

EQ: In what scenario (situation) would you want a $2,000 deductible?

Fact 1: If you have a low deductible then you will have a high premium and vise versa. 

Fact 2: You get to choose your deductible whether it's high or low.

How far are you in your understanding? I can:

1.0: Write a factual statement (not definition) concerning a deductible.

2.0: In your own word (not the teacher's), define deductible.

3.0: Describe how a deductible affects your premium.

4.0: Give an appropriate deductible for the following situations and describe why:

1) large savings, $50k car 2) large savings, $5k car 3) little/no savings, $50k car 4) little/no savings, $5k car

Odds of Loss

The numbers of losses compared to the total number sharing the risk

i.e. A 1 to 20 Odds of Loss (or 1:20; or 1/20; or 5%) would say that there is only 1 loss out of the 20 people sharing the risk.