Podcast
Questions and Answers
What are personal finances?
What are personal finances?
The practice of determining and managing a person's financial needs and goals for the future.
What is a consumer?
What is a consumer?
A person who purchases and uses goods and/or services.
What is interest in savings?
What is interest in savings?
Income earned from allowing someone else to use your money.
What is interest in borrowing?
What is interest in borrowing?
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What is principal in finance?
What is principal in finance?
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What is the Rule of 72?
What is the Rule of 72?
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What does investing mean?
What does investing mean?
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What does saving entail?
What does saving entail?
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What are savings?
What are savings?
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What is compound interest?
What is compound interest?
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What is a budget?
What is a budget?
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What is opportunity cost?
What is opportunity cost?
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What is an expense?
What is an expense?
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What are fixed expenses?
What are fixed expenses?
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What is income?
What is income?
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What are variable expenses?
What are variable expenses?
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What is credit?
What is credit?
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What is a credit report?
What is a credit report?
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What is debt?
What is debt?
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What is risk management?
What is risk management?
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What is fraud?
What is fraud?
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What is identity theft?
What is identity theft?
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What is an installment loan?
What is an installment loan?
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What is insurance?
What is insurance?
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What does PYF stand for?
What does PYF stand for?
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What does PSA stand for?
What does PSA stand for?
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The five elements of good financial planning include: Earn ______, Save ______, Spend ______, Use ______ cautiously, Protect your finances!
The five elements of good financial planning include: Earn ______, Save ______, Spend ______, Use ______ cautiously, Protect your finances!
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How many years will it take to double your money invested at a 6% interest rate?
How many years will it take to double your money invested at a 6% interest rate?
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How many years will it take to double your money invested at a 3% interest rate?
How many years will it take to double your money invested at a 3% interest rate?
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How many years will it take to double your money invested at a 4% interest rate?
How many years will it take to double your money invested at a 4% interest rate?
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Study Notes
Personal Finances
- Involves managing financial needs and goals for the future.
Consumer
- A person who buys and uses goods or services.
Interest (Saving)
- Earnings from lending your money to someone else.
Interest (Borrowing)
- Cost associated with using borrowed money.
Principal
- Initial amount of savings or the original sum borrowed.
Rule of 72
- A formula to estimate years needed to double an investment by dividing 72 by the annual interest rate.
Investing
- Committing money to ventures with potential for earning higher returns.
Saving
- Allocating a portion of current income for future use.
Savings
- Funds remaining after all expenses have been paid.
Compound Interest
- Interest earned on both original principal and previously accrued interest.
Budget
- A structured financial plan for managing income and expenses over a specific period.
Opportunity Cost
- The value of the next best alternative foregone when making a decision.
Expense
- Any spending incurred to purchase goods or services.
Fixed Expenses
- Regular costs that remain constant each month, such as rent.
Income
- Money received or earned from various sources, including wages and gifts.
Variable Expenses
- Costs that fluctuate each month, such as entertainment or repairs.
Credit
- The ability to acquire goods or services with a promise to pay later.
Credit Report
- Document summarizing personal credit history and financial transactions.
Debt
- Amounts owed to creditors or lenders.
Risk Management
- Process of anticipating and reducing financial loss.
Fraud
- Deceptive practices intended to manipulate someone into relinquishing value.
Identity Theft
- Crime involving unauthorized use of someone else's personal information.
Installment Loan
- Borrowed funds paid back over time through fixed payments.
Insurance
- Financial protection against various kinds of risks and losses.
PYF (Pay Yourself First)
- A strategy of prioritizing savings before covering other expenses.
PSA (Public Service Announcement)
- Campaign aimed at delivering important messages for public benefit, typically through media.
Five Elements of Good Financial Planning
- Earn: Focus on generating income.
- Save: Prioritize setting aside savings.
- Spend Wisely: Make informed purchasing decisions.
- Credit: Use cautiously to avoid debt pitfalls.
- Protect: Safeguard financial resources.
Doubling Investment at Various Interest Rates
- 6% interest rate: Approximately 12 years to double.
- 3% interest rate: Approximately 24 years to double.
- 4% interest rate: Approximately 18 years to double.
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Description
Test your knowledge of essential personal finance terms with these flashcards. Learn key concepts like personal finance management, consumers, and interest types. Perfect for anyone looking to improve their financial literacy.