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Personal Finance > Budgeting > Flashcards

Budgeting Flashcards

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1
Q

Concept

is a paper or electronic document used to record both planned and actual income and expenditures over a period of time

A

budget

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2
Q

Concept

are financial targets or ends that an individual or family wants to achieve perhaps more than five years

A

long-term goals

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3
Q

Concept

are financial targets that can be achieved between one year and perhaps three to five years

A

intermediate-term goals

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4
Q

Concept

are financial targets or ends that can be achieved in less than a year

A

short-term goals

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5
Q

Concept

are the projected dollar amounts in a budget that one plans to receive or spend during the period covered by the budget

A

budget estimates

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6
Q

Concept

gets you from gross income to what’s available for variable expenses

A

budget estimates

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7
Q

Concept

fixed expenses plus emergency savings

A

descretionary or controllable expenses

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8
Q

Concept

  • budget estimates for monthly income and expenses
  • annual estimated income and expenses are recorded in this calendar for each budgeting time period in an effort to identify surplus or deficit situations
A

cash-flow calendar

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9
Q

Concept

variable budgeting tool that places funds in savings to cover emergency or higher-than-usual expenses

A

revolving savings fund

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10
Q

two purposes for establishing a revolving savings fund

A
  1. to accumulate funds for large nonmonthly irregular expenses
  2. to meet occasional deficits due to income fluctuations
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11
Q

Concept

having this eliminates the most common complaint people offer about their personal finances

A

revolving saving fund

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12
Q

Concept

are techniques of planned spending to maintain control over personal spending so that planned amounts are not exceeded

A

budget controls

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13
Q

List

steps during the budgeting period

A
  • track what you spend
  • budget for shopping trips
  • record the purpose of expenditures
  • track any credit transactions
  • use a subordinate budget
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14
Q

Concept

occur when budget estimates in various classifications differ from actual expenditures

A

budget exceptions

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15
Q

Concept

is a detailed listing of planned expenses within a single budgeting classification

A

subordinate budget

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16
Q

Concept

this system of budgeting entails placing exact amounts of money into envelopes for purposes of strict budgetary control

A

envelope system

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17
Q

Concept

is the difference between the amount budgeted and the actual amount spent or received

A

budget variance

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18
Q

Concept

  • approach for determining your debt limit
  • if you are unable to get completely out of debt every four year (except for a mortgage), you probably lean on debt too heavily
A

continuous-debt method

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19
Q

Concept

Percentage of disposable personal income available for regular debt repayments aside from set obligations.

A

debt payments-to-disposable income method

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20
Q

Concept

is the amount of your income remaining after taxes and withholding for such purposes as insurance and flexible benefits programs

A

disposable income

21
Q

Concept

Your monthly debt repayments (including your prospective mortgage, and any other loan or alimony payments you must make) are divided by your gross monthly income and multiplied by 100.

A

debt-to-income method

22
Q

Concept

a ratio of 36 percent or less is desirable

A

debt-to-income method

23
Q

Concept

  • number of unemployed as a percentage of the labor force
A

unemployment rate

24
Q

Concept

  • people who had no employement during the reference week
  • were available for work at that time
  • had made specific efforts to find employment
A

unemployed

25
Q

Concept

measures the change in prices paid by consumers for goods and services

A

CPI

26
Q

Who issues?

Consumer Price Index

A

U.S. Bureau of Labor Statistics

27
Q

How often?

Consumer Price Index

A

Second Tuesday of every month

28
Q

Concept

is the most popular indicator of the nation’s overall economic health

A

Gross Domestic Product

29
Q

Concept

is about understanding economic metrics that impact everyone on a regular basis

A

economic literacy

30
Q

Concept

is an economic and political system of managing the productivity and employment resources of a country, state, or community

A

economy

31
Q

Concept

a country’s trade and industry are controlled by private owners who seek profit

A

capitalism

32
Q

Concept

is the condition of increasing production (business activity) and consumption (consumer spending) in the economy

A

economic growth

33
Q

Fill in the blank

tax increase depress ____

A

consumer demand

34
Q

Concept

  • is a process by which the economy grows and contracts over time
A

business cycle

35
Q

Concept

  • it can be depicted as a wavelike pattern of rising and failling economic activity
A

business cycle

36
Q

Concept

instead of normal economic times when credit usage grows, it shrinks because companies and individuals pay down their debts

A

deleveraging

37
Q

Concept

an economic indicator that moves in the same direction as the economy

A
  • procyclic
  • procyclical
38
Q

Concept

GDP is an example of what type of economic indicator

A

procyclic

39
Q

Concept

an economic indicator is one that moves in the opposite direction from the economy

A

countercyclic

40
Q

Concept

unemployment rate is an example of what type of economic indicator

A

countercyclic
* because it gets larger as the economy gets worse

41
Q

Concept

  • is a composite index, reported monthly by the Conference Board, that suggests the future direction of the U.S. economy
A

index of leading economic indicators (LEI)

42
Q

alternate names

nominal income

A

money income

43
Q

Concept

the amount that you have to spend in current dollars

A

nominal income

44
Q

Concept

  • income measured in constant prices relative to some base time period
  • it reflects the actual buying power
A

real income

45
Q

Concept

can be used to determine how long it will take for the value of the dollar to go down by one-half

A

Rule of 70

46
Q

Describe

Rule of 70

A
  • can be used to determine how long it will take for the value of the dollar to go down by one-half
  • simply divide 70 by the current inflation rate
47
Q

Concept

is the price of money

A

interest

48
Q

economic indicators

to assess the economic outlook of the United States

A
  1. GDP and jobs, including unemployment rate changes
  2. procyclic items like inflation and interest rates
  3. countercyclic items like unemployment and gold prices
  4. leading indicators like the consumer confidence index, LEI, and the stock market
  5. interest rates; and
  6. federal funds rate
49
Q
A

Personal Finance (10 decks)

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