32 Questions
FINANCIAL ISSUES THAT CAN AFFECT AN INDIVIDUAL.
PERSONAL FINANCE
PROCESS OF PLANNING EVERY ASPECT OF YOUR PERSONAL FINANCES,
PERSONAL FINANCE PLANNING
LEGAL PROCESS IN WHICH A COURT TAKES OVER SOME OF THE FINANCES OF A PERSON WHO IS UNABLE TO PAY HIS OR HER BILLS.
BANKRUPTCY
SOMETHING OWNED THAT CAN BE RAPIDLY CONVERTED TO CASH WITHOUT A RISK OF SIGNIFICANT LOSS.
LIQUID ASSETS
COST OF PURSUING ONE OPTION INSTEAD OF ANOTHER EXPRESSED AS THE VALUE OF THE ACTIVITY YOU GAVE UP.
OPPORTUNITY COST
INVOVLVE SPECIFYING FINANCIAL GOALS AND DESCRIBING IN DETAIL THE SPENDING FINANCING, AND INVESTING PLANS NEEDED TO REACH THOSE GOALS.
PERSONAL FINANCIAL PLAN
PROCESS OF FORECASTING FUTURE EXPENSES AND INCOME
BUDGETTING
ANYTHING OWNED, SUCH AS CARS, MOTORCYCLES, AND HOMES.
ASSETS
DIFFERENCE BETWEEN ASSETS AND LIABILITIES.
NET WORTH
WHAT WE OWE, OR OUR DEBT
LIABILITIES
AMOUNT OF A SPECIFIC ASSET THAT WE OWN AFTER SUBTRACTING ANY LIABILITIES.
EQUITY
MONEY COMING IN THROUGH WAGES EARNED, ALLOWANCE, OR OTHER SOURCES.
INCOME
MONEY OWED TO GOVERNMENT ON EARNED INCOME.
INCOME TAXES
THE MORE MONEY YOU MAKE, THE MORE INCOME TAXES YOU HAVE.
IMPACT TO BUDGE AND IN GENERAL
HOW MUCH READILY AVAILBALE CASH YOU HAVE ON HAND FOR MEETING IMMEDIATE WANTS AND NEEDS.
LIQUIDITY PLAN
INVOLVES MAKING DECISIONS ABOUT HOW MUCH CASH OR LIQUID ASSETS TO KEEP IN RESERVE AND HOW MUCH TO INVEST IN LIQUID ASSETS, SUCH AS REAL ESTATE (BUILDINGS/LAND)
MONEY MANAGEMENT
INVOLVES MAKING DESICIONS ABOUT GETTING CREDIT AND USING CREDIT.
CREDIT MANAGEMENT
"RENT" ON MONEY YOU BORROW
INTEREST
INCLUDE THE SPECIFIC INFORMATION ABOUT THE INTEREST RATE, THE LENDER WILL CHARGE AND PERIOD OF PAYING BACK LOAN.
PAYMENT TERMS
POSSIBILITY OF FINANCIAL LOSS
RISK
MONEY RECEIVED FROM VARIOUS SOURCES
CASH INFLOW
MONEY PAID OUT OR SPENT
CASH OUTFLOW
THOSE YOU PLAN TO ACCOMPLISH WITHIN THE NEXT YEAR.
SHORT-TERM GOALS
THOSE YOU AIM TO MEET WITHIN THE NEXT 1 TO 5 YEARS.
INTERMEDIATE-TERM GOALS
WILL TAKE MORE THAN FIVE YEARS TO ACCOMPLISH.
LONG-TERM GOALS
ANYTHING ON WHICH WE SPEND MONEY
EXPENSE
EXPENSE THAT REMAIN THE SAME FROM PERIOD TO PERIOD
FIXED EXPENSE
EXPENSES THAT MAY CHANGE FROM ONE PERIOD TO THE NEXT
VARIABLE EXPENSE
COMPONENTS OF FINANCIAL PLAN
- BUDGETING AND TAXES
- LIQUIDITY MANAGEMENT
- PERSONAL FINANCING
- PROTECTING YOUR ASSETS AND INCOME
- PERSONAL INVESTING
- RETIREMENT AND ESTATE PLANNING
- COMMUNICATION AND RECORD KEEPING
FOUR STEPS FOR CREATING BUDGET
- DETERMINING YOUR NET WORTH
- ESTABLISHING YOUR INCOME
- IDENTIFYING YOUR EXPENSES
- CONSIDERING THE IMPACTS OF TAXES
CAN CATEGORIZE FINANCIAL GOALS IN TERMS:
- SHORT-TERM GOALS
- INTERMEDIATE-TERM GOALS
- LONG-TERM GOALS
STEPS OF FINANCIAL DECISION MAKING
- ESTABLISH YOUR FINANCIAL GOALS
- EVALUATE YOUR CURRENT FINANCIAL POSITION
- IDENTIFY AND EVALUATE OPTIONS FOR ACCOMPLISHING YOUR GOALS
- PICK THE BEST PLAN
- PERIODICALLY EVALUATE YOUR PLAN
- REVISE YOUR FINANCIAL PLAN AS NECESSARY
Test your knowledge of financial issues affecting individuals, the planning process for personal finances, and the legal process of financial management for individuals unable to pay their bills. Explore concepts like liquid assets, opportunity cost, and financial goal setting.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free