VOCABULARY

529 Plans - a tax-advantaged savings plan designed to encourage saving for future educational costs.

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Budget -  an estimate of income and expenditure for a period of time that figures out what money you have left over to save.

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Compound interest - interest paid on interest. The result of reinvesting interest, rather than paying it out, so that interest in the next period is then earned on the principal sum plus previously accumulated interest.

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Compound debt - interest on debt paid on interest on debt. When you use credit and don’t pay off the entire amount by the initial due date, you are setting yourself up to pay compound interest.

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Credit History - a record of a person’s ability and responsibility in repaying debts.

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Debt - owing money.

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Endorsing a check - signing your name on the back of a check in the appropriate area. Only the receiver of the check can do this.

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Estimated Family Contribution (EFC) - estimate of what your family is going to pay to cover the costs of tuition, room and board, books, school fees and transportation.

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Free Application for Federal Student Aid (FAFSA) - Prospective students use this form to apply for student financial aid.

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Fraudulent transaction - when a credit card is stolen and used by someone who is not you.

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Interest - the money the bank pays you for saving your money there (while they use that money to make loans).

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Investing - putting money away for the future while also earning money over time.

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Overdraft fees - fee charged when a withdrawal from an individual's bank account exceeds the available fee.

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Needs - necessary goods and services.

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Return - the any change in value of the investment over time (in dollars or in percentage).

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Wants - goods and services that are desired but not necessary.