Budgets & Financial Plans

Question 1

Asset

Answer 1

Anything you own with financial value. (Cash, bank accounts, cars, house).

Question 2

Financial Asset

Answer 2

An asset that is “liquid” meaning cash or can be sold quickly for cash.

Question 3

Physical Asset

Answer 3

Can be sold for cash but not usually quickly. Examples: cars, homes.

Question 4

Liability

Answer 4

Anything that you owe (credit card, home loan etc.)

Question 5

Net Worth

Answer 5

All your assets minus all your liabilities. Can be positive or negative depending on how much you owe.

Question 6

Fixed expenses

Answer 6

Expenses that are the same amount every month like rent or a car payment.

Question 7

Variable expenses

Answer 7

Expenses that occur regularly but their amounts are variable, like groceries or gas for your car.

Question 8

Irregular Expenses

Answer 8

Expenses that happen occasionally or are unpredictable, like gifts or emergencies.

Question 9

Financial Planning Tips for Teens/Young Adults

Answer 9

Learn self discipline and moderation
Create a budget
Save AND invest
Consider working with a finance expert/set goals
Create an emergency fund

Question 10

Mistakes to Avoid - teens/young adults

Answer 10

Using credit cards irresponsibly
Saving but NOT investing
Not having an emergency fund
Failing to set financial goals
Misusing student loans

Question 11

8 Components of a financial plan for adults

Answer 11

1. Set financial goals
2. Prepare a Net Worth Statement
3. Create a budget
4. Debt management plan
5. Retirement plan
6. Emergency Fund
7. Insurance (health, life, home, auto, long-term care)
8. Estate plan (will, power of attorney etc)