Personal Finance Exam
Card Set Information
Personal Finance Exam
a process of setting goals, developing a plan to achieve them, and puttin the plan into action.
the very basic things that we MUST have to survive.
the things that make life more interesting and fun, but you could live without them if you had to.
the beliefs and practices in your life that are very important to you and can be influenced by your parents, friends, religion, and experiences.
something that you aim for that will point you in the direction you need to take.
a goal that is for your life and what you want to do with it, for instance, going to college or taking the SATs.
a goal that involves money, how you're going to get it, how you are going to save, how much you are saving, what you are planning on using it for, ect.
goals that you want to acheive within the next three months.
goals that are set for three months to a year.
goals that it will take you more than a year to achieve.
with long-term goals, you have to be willing to give up something you want now to get something even better in the furture.
I want to go to Panama City for Spring Break
I will need $150 for my share of the hotel room for the week.
I will split the driving with my friends and take $200 more for gas, food, and other spending.
I will save $60 a month from my paycheck for the next six months.
I want to save all the money by March 1st.
SMART GOALS stands for...
specific, measurable, attainable, realistic, and time-bound
measures the money you recieve and the money you spend.
Name the Six steps in making a decision.
indentify goal, establish criteria, examine options, weigh pros and cons, make decision, evaluate results
when you cannot accomplish both goals and decide on one now and one later
when a major decision leads to smaller ones
name the five steps to financial planning
set smart gols, analyze information, create plan, implement plan, and monitor and modify plan
a plan for managing your money during a given period of time.
spending plan or budget
money you have coming in
fee collected by a federal government to support its programs
federal income tax
a fee that is collected to help pay for state services
state income tax
a fee that provides a small income and other services to the elderly
social security tax
fee that provides medical insurance to the elderly and other disabled Americans
the total amount of income from your wages or before any payrolll deductions
know as you take home pay
what you spend money on
what people usually do to meet short term goals
means you are setting your money aside for longer term goals
refers to the relationship amoung time, money, and rate of interest
time value of money
rise in the cost of goods and services over time
the idea of earning interest on interest
compounding or compound interest
a share of the profits you recieve as a stockholder
growth stock prices
savings account, savings bonds, cds, money market deposit accounts, money market mutual funds, corporate and government bonds
stocks, real estate, collectibles, and mutual funds
reducing investment risk by putting money in several different types of investments
investing a fixed amount in the same investment at regular intervals, regardless of what the market is doing.
dollar cost averaging