So your daughter/son is studying poetry vocabulary in school this week. She is probably worried about learning the difference between caesura and enjambment. These are important distinctions for kids. (Caesura is a stop in the middle of a line of poetry and enjambment is when a complete thought flows past the end of one line onto another, often ending in a caesura.)
But what about the words they’ll actually use in life, like “Bounced Check” or “APR”? When is it financial literacy week in school?
April is financial literacy month, so hopefully, your answer is, “Next month, Kyle!” But just in case your children don’t learn anything about money in school during financial literacy month, here are some must-know vocab words relating to money that any kid should know. And for heaven’s sake, if you don’t know these words yourself, brush up!
Account Number – The second number on the bottom of a check. This identifies you as an individual to a bank or financial institution like PerkStreet. Unlike the Routing Number, you should always keep this secret.
ATM – Otherwise known as an “Automated Teller Machine,” an ATM lets you withdraw cash from an account with a Debit Card and a PIN any time of the day or night. PerkStreet has 37,000 free ATMs across the U.S.
APR – Also known as “Annual Percentage Rate,” the APR is what you pay on an evil Credit Card after you’ve failed to pay your Principle in full. Simply put, it’s the Interest you’re charged for a debt scoped out over a year.
Appreciate – To become more valuable. This is what you want all your investments, like your Retirement Savings, to do over time. If you’re smart, you’ll learn to appreciate appreciation. See what I did there?
Bankruptcy – Legally declaring your inability to pay Debts. Bankruptcy stays on your Credit Score for many years and doesn’t necessarily cancel all debts.
Bounced Check – A paper check written for more money than was in a Checking Account when it was cashed. Bouncing checks can result in a Surchage.
Budget – Another word for awesome. Just kidding. Kind of. A Budget is a list of all planned Expenses and Revenues. A good Budget has more total Revenues than total Expenses. Duh.
Checking Account – An account offered by a bank or financial institution that allows you to write paper checks and access Liquid Funds through a Debit Card. Make sure your Checking Account is backed by the FDIC like the ones PerkStreet offers.
Credit Card – An evil magic wand that gets people in serious trouble when they use it. Just kidding. Kind of. A Credit Card is a plastic card used to buy things with borrowed money. Credit Cards are a major source of Debt for Americans, but luckily, Debit Cards are rapidly growing more popular while the number of Credit Cards has basically stayed the same over the last few years.
Credit Score – A long-term rating of your quality and reliability as a borrower. It factors in things like Bankruptcy, a history of late payments and the time you’ve been at your job. PerkStreet never checks your Credit Score when considering you for an account.
Debit Card – A plastic card that provides an alternative to cash and is generally accepted most places a Credit Card would be. PerkStreet’s Debit Cards are accepted anywhere you see a MasterCard® logo, and they earn tons of cash back. The U.S. Government even issues tax returns and other money to citizens on Debit Cards, so you know they’re safe, and they generally provide the same kind of fraud protections as Credit Cards. Unlike Credit Cards, there’s no crippling debt associated with Debit Cards because you use them to spend your OWN money.
Debt – Money owed to a lender, or the sum total of all the money a borrower owes to many lenders. This stuff is almost always bad news and it means paying Interest because you borrowed money it will take you a while to repay.
Discretionary Expense – Something you buy because you want it, not because you need it. Discretionary Expenses are the enemy of a good Budget and often throw people into Debt.
Emergency Fund – Money you set aside for the unexpected. You gotta have an Emergency Fund if you want to keep your Budget in order through bumps and hiccups. Many PerkStreet customers keep a $5,000 Emergency Fund in their PerkStreet Checking Account so they can earn unlimited 2% cash back on all their non-PIN purchases.
Expense – Something you purchase or an outflow of money to someone else.
FAFSA – The Free Application for Federal Student Aid, called the FAFSA for short, is something you fill out to receive financial aid before becoming a college student (and during college as well). If you’ve been avoiding finishing this as a high school senior, get it done! It can also help you qualify for work study.
Inflation – The result of excessive growth in the money supply in a market, Inflation is the reason the milk you get at lunch costs way more now than it did when I was a kid. It’s also the reason you should put more money away than you think for your Retirement Savings.
Interest – A fixed charge for borrowing money usually expressed as a percent of the amount borrowed. You want to avoid paying this unless you absolutely need to.
Joint Account – An account provided by a bank or financial institution that two people share. PerkStreet offers Joint Checking Accounts.
Liquid Funds – Money you can take out of accounts like the ones PerkStreet offers without paying a penalty or Surcharge. Some Investments will charge you a Surcharge for taking money out before a pre-agreed-upon date.
Loss-Leader – A special kind of sale where a retailer offers something at a lower price than they acquired it for (Super cheap!) in an effort to get people to buy more merchandise than just that thing. Loss-Leaders are great deals, especially if you avoid making other purchases when you pick one up.
Phishing – A scam someone operates online, especially through email, where they pretend to be someone they’re not in an effort to steal your money or identity. PerkStreet will never email you and ask you for high-security information like your Account Number or social security number. Be wary of anyone who does.
Principle – Nope, not the guy who wears a suit at school. (That’s princiPAL.) Principle is the money you borrow that you later pay Interest on.
PIN – Also known as your Personal Identification Number, this is a 4-digit code you enter when you take money out of an ATM or when you make a PIN purchase at the register. PIN purchases don’t earn rewards at PerkStreet, so avoid them to earn more cash back perks!
Retirement Savings – Money you set aside for a time when you won’t have to work anymore. Do this right and you’ll live comfortably in your old age. Forget about it and you could be in a tough situation. The trick is to start really early.
Revenue – Money you receive or earn. This should always be a bigger number in your Budget than your Expenses.
Routing Number – The not-so-secret number on the left side at the bottom of your check. This is the same for all Checking Accounts associated with a given bank or financial institution. At PerkStreet, the Routing Number is 031101114.
Savings – Money you put aside so you can stop living paycheck-to-paycheck and live a comfortable life. Saving $5,000 as an Emergency Fund inside your PerkStreet Checking Account is awesome because it let’s you earn 2% cash back on non-PIN purchases after the 90-day introductory 2% earning rate every new customer receives.
Smishing – Not something from the show Jersey Shore, this is a lot like Phishing, but it’s done with a mobile phone. Thieves who Smish will try to steal your identity or your money through text messages, so don’t share your social security number or Account Number through your phone either.
Surcharge – A fee associated with a bank or financial institution. PerkStreet’s Surcharges are plain as day. You can find them right HERE, or by Googling “PerkStreet Fees.” Be smart with your PerkStreet Checking Account and you can avoid our fees altogether!
Was that so hard? Teach your kids about the rewards of Budgeting and Debit Cards as well as the risks of Credit Cards and Debt while they’re young. It will help them avoid financial pitfalls when they’re older. Poetry vocabulary is good to know, but this stuff is absolutely crucial!
What are your favourite financial key terms? Please share below so others can teach their kids.