Financial Literacy (or FinLit, for short)

Financial literacy is the ability to understand and use various financial skills, including personal financial management, budgeting and investing. At Service Credit Union, part of our mission is to provide the resources and tools needed to optimize our members’ financial well-being. We believe in the power of education, and sharing that education with our members so they can achieve their highest potential.

To accomplish that goal, Service CU recently introduced an interactive, mobile-first financial education resource, EVERFI Achieve. It is available, free of charge, to our members. EVERFI Achieve offers a robust library of information about how to manage finances, including timely training for “Building Financial Resilience” and “Financial Wellness in Uncertain Times.” That resource, says Service CU’s VP of Marketing Wendy Beswick, “gives our members the tools they need for a better future.” For more on EVERFI, visit servicecu.org.

FinLit Terms You Should Know

Amortization: A non-cash operating expense that reduces the value of intangible assets (such as patents, trademarks or goodwill) in a systematic manner. Amortization is recorded in the financial statements of an entity as a reduction in the carrying value of the intangible asset in the balance sheet and as an expense in the income statement.

Break-Even Analysis: A calculation of the approximate sales volume required to just cover costs, below which production would be unprofitable and above which it would be profitable. Break-even analysis focuses on the relationship between fixed cost, variable cost and profit.

Collateral: Assets pledged by a borrower to secure a loan or other credit, and subject to seizure in the event of default.

Current Assets: A balance sheet item that equals the sum of cash and cash equivalents, accounts receivable, inventory, marketable securities, prepaid expenses and other assets that could be converted to cash in less than one year.

Current Liabilities: A balance sheet item that equals the sum of all money owned by a company and due within one year.

DBA: Doing Business As — generally a trade name such as “Bob’s Burgers” is used, instead of the legal name of Blocker & Sons LLC.

Depreciation: A non-cash operating expense that reduces the value of a tangible asset as a result of wear and tear, age or obsolescence. Depreciation is recorded in the financial statements of an entity as a reduction in the carrying value of the asset in the balance sheet and as an expense in the income statement.

Guarantor: The legal entity and/or person who guarantees an obligation and has a legal duty to fulfill it.

Income Statement: Shows the entity’s income and expenses (similar to a profit and loss statement).

Liabilities: A financial obligation, debt or claim, i.e., notes payable and accounts payable.

Limited Partnership: A business organization with one or more general partners, who manage the business and assume legal debts and obligations, and one or more limited partners, who do not participate in dayto-day operations and are liable only to the extent of their investments.

P&L (Profit and Loss Statement): Also considered as income statement or statement of earnings. Measures Net Income or Loss over a defined period of time. In addition, having the simple formula of Revenues – Expenses = Net Income/Loss.

S-Corporation: A form of corporation, allowed by the IRS for most companies with 35 or fewer shareholders, which enables the company to enjoy the benefits of incorporation but be taxed as if it were a partnership.

Working Capital (WC): The amount of current assets that is left after all current debts are paid.

Service Credit Union’s Online Tools Make It Easy

Financial Literacy: The EVERFI Achieve program is a digital financial literacy library designed to help you better manage your money. Our interactive library consists of 30 training sequences, ranging from 3-6 minutes each. Improve your financial wellness through a variety of topics such as credit cards, building emergency savings, retirement, homeownership and more. It is designed for mobile devices or tablets, so you can learn anytime, anywhere.

Managing a Small Business: Understand the financial fundamentals of managing a small business. This training sequence includes developing a business plan, small business banking services, small business financial statements, how businesses obtain and use credit, and financial well-being for entrepreneurs.

Business Banking Services: Take care of your business needs with a full suite of banking services: business checking, business savings, business online banking, bill pay services and more. Download a business membership application.

Budget Template: A free template can make creating a budget less daunting. Smartsheet offers budget templates for everything from a business to a household.

Online Transactions: View all of your Service CU transactions online, access electronic account statements and deposit checks remotely. If you have a checking account with Service CU, you can pay bills online. Sign up for online banking.

Financial Counseling: Service CU partners with GreenPath Financial Wellness, a national nonprofit organization, to give our members access to free financial counseling. The GreenPath certified counselors equip you with the knowledge and tools to lead financially healthy lives. You can learn how to ease financial stress, manage debt, save for the future, make informed decisions and achieve your financial goals.