Personal Finance & Investing Basics
Build a strong financial foundation with this comprehensive flashcard deck on personal finance and investing basics. Designed for beginners and anyone looking to improve their money management skills, this deck covers essential topics such as budgeting, saving, credit scores, debt management, passive income, and smart investing strategies.
Cards in this deck
What is personal finance?
Personal finance is the management of income, expenses, savings, and investments to achieve financial goals.
What is a budget?
A budget is a financial plan that tracks income and expenses over a specific period.
What is an emergency fund?
Money saved to cover unexpected expenses, typically 3–6 months of living costs.
What is compound interest?
Interest earned on both the initial amount and previously earned interest.
Why is compound interest important?
It helps money grow faster over time, making it essential for long-term investing.
What is a credit score?
A numerical representation of a person’s creditworthiness based on their credit history.
How can you improve your credit score?
Pay bills on time, reduce debt, and avoid excessive credit inquiries.
What is passive income?
Income earned with minimal ongoing effort, such as rental income or dividends.
What are stocks?
Shares of ownership in a company that may provide returns through price growth or dividends.
What are bonds?
Fixed-income investments where you lend money to an entity in exchange for interest.
What is diversification?
Spreading investments across different assets to reduce risk.
What is risk tolerance?
The level of risk an investor is willing to take.
What is a mutual fund?
A pooled investment managed by professionals that invests in stocks, bonds, or other assets.
What is an ETF?
An Exchange-Traded Fund that trades like a stock and holds multiple assets.
What is inflation?
The increase in prices over time, reducing purchasing power.
Why is saving important?
It provides financial security and helps achieve long-term goals.
What is debt-to-income ratio?
A measure comparing monthly debt payments to income.
What is financial independence?
Having enough income or savings to cover living expenses without working.
What is a retirement plan?
A long-term investment strategy to ensure income after stopping work.
What is asset allocation?
The strategy of dividing investments among asset categories like stocks, bonds, and cash.