With so many financial terms to master, it can be difficult for consumers to learn them all and understand how they may or not apply to their particular circumstances.
January 17, 2018
Understanding basic financial terms is key to living a healthy financial life. Sometimes important financial terms can be overwhelming or misleading and make it hard for consumers to navigate the best financial path. In an effort to help reduce confusion, ACCC explains financial terms every consumer should know in 2018.
“With so many financial terms to master, it can be difficult for consumers to learn them all and understand how they may or not apply to their particular circumstances,” said Steve Trumble, President and CEO of American Consumer Credit Counseling, which is based in Newton, MA. “Understanding even the most basic financial terms is a stepping stone towards achieving a successful financial life.”
According to the NFCC’s Consumer Financial Literacy Survey, 57 percent of respondents give themselves an A or B on their personal finance knowledge. Eighty percent of respondents believe they could benefit from advice and answers to everyday financial questions from a professional, up from 75 percent last year.
ACCC explains basic financial terms every consumer should know.
1. IRA – Individual Retirement Account. Anyone, employed or unemployed, can contribute to an IRA up to $5,000 per year. All investments are made by the contributor, meaning there is no match made by an employer. The money is only taxed when it is withdrawn.
2. 401(k) – This is an employer sponsored retirement plan. Most employers offer a match up to a certain percent. Employees are allowed to contribute up to $18,000 per year. This money is pre-taxed and will not be…