Podcast
Questions and Answers
Which aspect of personal finance involves analyzing your current situation and planning for future financial needs?
Which aspect of personal finance involves analyzing your current situation and planning for future financial needs?
- Savings and retirement planning
- Budgeting and insurance
- Mortgage planning
- Projecting short-term and long-term funding needs (correct)
How does the envelope system support budgeting?
How does the envelope system support budgeting?
- By automating bill payments
- By categorizing expenses and keeping cash tucked away for each (correct)
- By calculating savings percentages
- By tracking income sources
Which money management philosophy argues that people can better manage their financial lives regardless of their situation?
Which money management philosophy argues that people can better manage their financial lives regardless of their situation?
- Peter Dunn's Ideal Budget (correct)
- Alexa von Tobel's 50/20/30 System
- Suze Orman's Debt Eliminator
- Dave Ramsey's Envelope System
In the 50/20/30 system, what percentage of income is allocated towards essentials like housing and transportation?
In the 50/20/30 system, what percentage of income is allocated towards essentials like housing and transportation?
According to Suze Orman, what does the 'Expense Tracker' primarily help individuals understand?
According to Suze Orman, what does the 'Expense Tracker' primarily help individuals understand?
Which of Keown's basic principles emphasizes the need for financial literacy to make informed decisions?
Which of Keown's basic principles emphasizes the need for financial literacy to make informed decisions?
Why is understanding the 'Time Value of Money' important in personal finance?
Why is understanding the 'Time Value of Money' important in personal finance?
How do taxes primarily affect personal finance decisions?
How do taxes primarily affect personal finance decisions?
Why is liquidity an important aspect of personal finance?
Why is liquidity an important aspect of personal finance?
What does 'Risk and Return Go Hand in Hand' imply in investment?
What does 'Risk and Return Go Hand in Hand' imply in investment?
What is the primary focus of 'Waste Not, Want Not - Smart Spending Matters'?
What is the primary focus of 'Waste Not, Want Not - Smart Spending Matters'?
How does Suze Orman’s 'Debt Eliminator' tool help individuals manage their finances?
How does Suze Orman’s 'Debt Eliminator' tool help individuals manage their finances?
Which principle of personal finance is directly related to purchasing insurance?
Which principle of personal finance is directly related to purchasing insurance?
How does the envelope system help control overspending?
How does the envelope system help control overspending?
According to Peter Dunn's budget, what percentage of income should ideally be allocated to housing?
According to Peter Dunn's budget, what percentage of income should ideally be allocated to housing?
In Alexa von Tobel's 50/20/30 system, the '20' represents what?
In Alexa von Tobel's 50/20/30 system, the '20' represents what?
What key aspect of personal finance does Suze Orman's 'Expense Tracker' highlight?
What key aspect of personal finance does Suze Orman's 'Expense Tracker' highlight?
Which of Keown's basic principles is most closely related to creating a financial budget?
Which of Keown's basic principles is most closely related to creating a financial budget?
How can one apply 'Just Do It!' in the context of personal finance?
How can one apply 'Just Do It!' in the context of personal finance?
Why is understanding the impact of taxes crucial in personal finance management?
Why is understanding the impact of taxes crucial in personal finance management?
Flashcards
What is Personal Finance?
What is Personal Finance?
Includes all financial decisions and activities of an individual, such as budgeting, insurance, mortgage planning, savings and retirement planning.
Dave Ramsey's Envelope System
Dave Ramsey's Envelope System
A way to track exactly how much money you have in each budget category for the month by keeping your cash tucked away in envelopes.
Peter Dunn's Ideal Budget
Peter Dunn's Ideal Budget
A budgeting method utilizing categories and percentages to break down expenses. This recommends 25% on housing, 15% on transportation, 12% on groceries, etc.
Alexa von Tobel's 50/20/30 System
Alexa von Tobel's 50/20/30 System
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Debt Eliminator
Debt Eliminator
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Expense Tracker
Expense Tracker
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Knowledge is Power
Knowledge is Power
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Nothing Happens Without a Plan
Nothing Happens Without a Plan
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The Time Value of Money
The Time Value of Money
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Taxes Affect Personal Finance Decisions
Taxes Affect Personal Finance Decisions
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Life Happens - The Importance of Liquidity
Life Happens - The Importance of Liquidity
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Waste Not, Want Not - Smart Spending Matters
Waste Not, Want Not - Smart Spending Matters
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Protect yourself Against Catastrophes
Protect yourself Against Catastrophes
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Risk and Return Go Hand in Hand
Risk and Return Go Hand in Hand
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Mind Games and Your Money
Mind Games and Your Money
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Just Do It!
Just Do It!
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Study Notes
- Managing Personal Finance pertains to Lesson 7.
- The lesson will cover money management philosophies and Keown's basic principles of personal finance.
Personal Finance
- All financial decisions and activities of an individual are included in personal finance such as budgeting, insurance, mortgage planning, savings and retirement planning.
- Analyzing current financial position, projecting short- and long-term funding needs, and executing a plan to fulfill needs are involved.
- Largely depends on earnings, cost of living, personal goals and wants.
Dave Ramsey’s Envelope System
- It is a method of tracking how much money is available in each budget category for the month by keeping cash in envelopes.
- Budgeting allowances down to the last peso is required.
- All expenses must be determined, itemized and labeled on envelopes before predetermined amounts are placed inside.
Peter Dunn’s “Ideal Budget”
- This approach uses percentages to break down expenses.
- Dunn believes that everyone can better manage their finances, regardless of their situation.
- The budget allocates:
- 25% to housing
- 15% to transportation
- 12% to groceries and dining out
- 10% to savings
- 10% to utilities and phone bill
- 5% to charity
- 5% to clothing
- 5% to entertainment
- 5% to medical expenses
- 5% to holidays and gifts
- 3% to miscellaneous expenses
Alexa von Tobel’s 50/20/30 System
- This system is designed for people who want to achieve their financial goals without complete deprivation.
- 50% of money goes to essentials like food and transportation.
- 20% of money goes to savings.
- 30% of money goes to shopping, travel, and other non-essential items.
Suze Orman‘s Debt Eliminator and Expense Tracker
- The Debt Eliminator provides an honest view of what individuals owe and what is needed to resolve it.
- The Expense Tracker gives a clearer idea of incoming and outgoing money each month.
Keown’s Basic Principles of Personal Finance
- Knowledge is power.
- Nothing happens without a plan.
- Time has value.
- Taxes affect personal finance decisions.
- Life happens - liquidity is important.
- Avoid waste, smart spending is important.
- Protection against catastrophes is needed.
- Risk and return go hand in hand.
- Mind games affect money.
- Just do it!
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