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BUSINESS FINANCE > BF-M7 > Flashcards

BF-M7 Flashcards

MANAGING PERSONAL FINANCE

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1
Q

______ defines all financial decisions and activities
of an individual or household, including budgeting,
insurance, mortgage planning, savings and retirement
planning.

A

Personal finance

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2
Q

UNSCRAMBLE

(cinanalif ilannpgn) and (bgundigte pserilpiinc)
discussed in the past modules are also applicable in personal
finance.

A

Financial planning
budgeting principles

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3
Q

A ____ is an important tool.

A

personal budget

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4
Q

It is a finance plan
that allocates future personal income towards expenses,
savings and debt repayment.

A

personal budget

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5
Q

In making your budgets you
should also consider your ____ and _____

A

needs
wants

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6
Q

6 basic activities in personal finance

A
  1. EARNING
  2. BORROWING
  3. SAVING
  4. INVESTING
  5. SPENDING
  6. Donating
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7
Q

You are receiving money for services rendered, goods sold or interest income.

A

EARNING

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8
Q

You are receiving money from lenders causing a debt obligation.

A

BORROWING

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9
Q

You are setting aside money for a specific purpose within a short period of time.

A

SAVING

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10
Q

You are putting your money into work so that it can earn interest or appreciate within a long period of time.

A

INVESTING

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11
Q

This involves greater risk but
yields greater returns

A

INVESTING

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12
Q

You are giving out money for your personal needs or wants.

A

SPENDING

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13
Q

You are giving out your money for charitable purposes.

A

Donating

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14
Q

_____ goals, such as saving for a vacation or paying off small
debts, will be achieved within the next year

A

short-term

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15
Q

______ goals have a time frame from one to five years.

A

intermediate

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16
Q

_____ goals involve financial plans that are more than five years off, such as retirement, money for children’s college education, or the purchase of a vacation home

A

long-term

17
Q

TIMING OF GOALS
three time frames:

A

short-term goals
intermediate goals
long-term goals

18
Q

______ goals usually occur on a periodic basis and involve
items that are used up relatively quickly, such as food, clothing, and entertainment. Such purchases, if made unwisely, can have a negative
effect on your financial situation.

A

Consumable-product

19
Q

_____ goals usually involve infrequently purchased,
expensive items such as appliances, cars, and sporting equipment; these consist of tangible items.

A

Durable-product

20
Q

These goals may relate to personal relationships, health,
education, and leisure. Goal setting for these life circumstances is also necessary for your overall well-being

A

intangible-purchase goals

21
Q

Goal-Setting Guidelines:

__— ____, so you know exactly what your goals are so you can create a plan designed to achieve those objectives.

__— ____ with a specific amount.

__— ____, indicating a time frame for achieving the goal, such as three years. This allows you to measure your progress toward your financial goals

__— _____, involving goals based on your income and life situation.

__— ____, providing the basis for the personal financial activities
you will undertake.

A

S— specific
M— measurable
T— time-based
R— realistic
A— action-oriented

SMART

22
Q

10 Basic Principles of Personal Finance

A
  1. KNOW YOUR TAKE HOME PAY
  2. PAY YOURSELF FIRST
  3. START SAVING AT YOUNG AGE
  4. COMPARE INTEREST RATES
  5. DON’T BORROW WHAT YOU CAN’T REPAY
  6. BUDGET YOUR MONEY
  7. HIGH RETURNS EQUAL HIGH RISKS
  8. MAP YOUR FINANCIAL FUTURE
  9. YOUR CREDIT PAST IS YOUR CREDIT FUTURE
  10. STAY INSURED
23
Q

(Basic Principles of Personal Finance)

Before committing to significant expenditures, estimate how much income is likely to be
available for you.

A

KNOW YOUR TAKE HOME PAY

24
Q

(Basic Principles of Personal Finance)

Before paying bills and other financial obligations, set aside an affordable amount each
month in accounts designated for long-range goals and unexpected emergencies.

A

PAY YOURSELF FIRST

25
Q

(Basic Principles of Personal Finance)

Recognize that your total savings are determined both by the interest you earn on those
savings and the time period over which you save.

A

START SAVING AT YOUNG AGE

26
Q

(Basic Principles of Personal Finance)

Obtain rate information from multiple financial services firms to get the best value for your
money.

A

COMPARE INTEREST RATES

27
Q

(Basic Principles of Personal Finance)

Be a responsible borrower who repays as promised, showing you are worthy of getting credit in the future.

A

DON’T BORROW WHAT YOU CAN’T REPAY

28
Q

(Basic Principles of Personal Finance)

An annual budget to identify expected income and expenses, including savings, will help you live within your income.

A

BUDGET YOUR MONEY

29
Q

(Basic Principles of Personal Finance)

Recognize that no one will pay you high interest rates on a sure thing.
Diversification of assets is the best protection against risk

A

HIGH RETURNS EQUAL HIGH RISKS

30
Q

(Basic Principles of Personal Finance)

Take time to list your financial goals, along with a realistic plan for achieving them.

A

MAP YOUR FINANCIAL FUTURE

31
Q

(Basic Principles of Personal Finance)

Be aware that credit bureaus maintain credit reports, which record borrowers’ histories of repaying loans. Negative information in credit reports can affect your ability to borrow at a later point.

A

YOUR CREDIT PAST IS YOUR CREDIT FUTURE

32
Q

(Basic Principles of Personal Finance)

Purchase insurance to avoid being wiped out by a financial loss, such as an illness or accident

A

STAY INSURED

BUSINESS FINANCE (5 decks)

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