Card Set Information
Earnings are what?
income from work
What is a spending diary?
records how much money a person/family spends over a period of time
What is income?
is any money that comes to a family from payments for work or from investments
What are investments?
money placed specifically to earn more money, such as certificates of deposit, savings bonds, or business developments
What are budgets?
formal or informal plans for spending and saving money from earnings
What is spending?
money used for goods and services
What is savings?
money set aside for future needs. Generally large savings earn some interest income from commercial banks or savings and loans
What can savings help with?
unexpected emergencies of pay for bigger purchases such as vacations, home repairs or appliances
If spending and savings totals more than the total income to a family, what can they do?
credit can make up the difference, however credit has an opportunity cost
What are credit cards?
loan money for a period of time
People who use credit cards pay what to banks?
interest, it can be called interest expense
credit cards allow families to do what?
make consumer purchases with loaned money
Decisions about spending and saving involve what?
costs and benefits
Cost are what?
a loss or sacrifice, which can be the price of a good or service or the trade off opportunity
What is a benefit?
a gain or advantage, which can either be a good or service
What is a trade-off?
the options from which you choose when you have multiple opportunities for using money
What is a need?
something that is essential for survival
What is a want?
something that is NOT necessary for survival
What are goods?
things that can be bought or sold
what are services?
payments made to someone that does something, like the dentist