1.4 Vocab Flashcards
Financial Plan
a plan of action that allows a person to meet not only their immediate needs but also their long-term goal
a plan of action that allows a person to meet not only their immediate needs but also their long-term goal
Financial Plan
Net worth
the amount by which the value of a person’s assets exceeds or falls behind the value of their liabilities (what you own minus what you owe)
the amount by which the value of a person’s assets exceeds or falls behind the value of their liabilities
Net worth
Asset
anything that is owned by an individual, including money in the bank or investments
anything that is owned by an individual, including money in the bank or investments
Asset
Liability
financial debts or obligations
financial debts or obligations
Liability
Positive Net Worth
the dollar value of a person’s assets is greater than the dollar value of their liabilities
the dollar value of a person’s assets is greater than the dollar value of their liabilities
Positive Net Worth
Negative Net Worth
the dollar value of a person’s liabilities is larger than the value of their assets
the dollar value of a person’s liabilities is larger than the value of their assets
Negative Net Worth
Net Income
what a person earns after payroll taxes and other deductions are taken out; often referred to as take-home pay
what a person earns after payroll taxes and other deductions are taken out; often referred to as take-home pay
Net Income
Expense
the cost of goods or services; money paid out
the cost of goods or services; money paid out
Expense
