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Personal Finance > Ch.2- 5 > Flashcards

Ch.2- 5 Flashcards

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1
Q

What are values?

A

principles, standards, or qualities that you consider desirable
Helpful in career planning

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2
Q

What are the three financial goals and explain?

A

Short-term goals = to be accomplished within one year
Intermediate-term goals = to be accomplished within 3 to 5 years
Long-term goals = to be accomplished beyond 5 years

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3
Q

What is an income statement?

A

The Income Statement (Cash-Flow Statement) tracks where your money came from and went.

Income-Expenses = Surplus (net gain) or Deficit (net loss)

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4
Q

Define Stewardship

A

Properly managing the resources that God has committed to our care.

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5
Q

What is standard of living?

A

Material well-being and peace of mind that individual or groups earnestly desire and seek to attain,
to maintain if attained,
to preserve if threatened,
and to regain if lost.

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6
Q

What is a balance sheet?

A

Snapshot of assets, liabilities, and net worth on a particular date.
Assets-liabilities=Net worth

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7
Q

What is a budget?

A

A written plan to help you live within your means

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8
Q

What are the three major financial statements?

A
  1. Balance sheet: Where we are (present)
  2. Income Statement (Where we’ve been) past
  3. Budget: Where we’re going (future)
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9
Q

A budget helps you ….?

A 
Manage your money
Eliminate waste
Predict future needs more accurately
Achieve financial goals
Prepare for emergencies
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10
Q

Budgets will NOT…?

A
  • Solve all your immediate problems.
  • Make you use it.
  • Eliminate all decision-making.
  • Balance by itself.
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11
Q

What are fixed expenses?

A

Difficult to change or avoid

Examples: Rent, Automobile loan payments ,Taxes, Insurance

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12
Q

What are variable expenses?

A

Relatively easy to change

examples:Entertainment, Meals, Medical

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13
Q

What is marginal tax rate?

A

The tax rate at which your last dollar earned is taxed, and it refers to the highest tax bracket that your taxable income

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14
Q

List a type of bank account.

A
  • NOW-checking (interest earning)
  • Savings account
  • checking accounts (Transactions)
  • Super NOW (limits number of checks)
  • Money market account (MMA)
  • CD’s
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15
Q

What is a certificate of deposit?

A

CD’s
An interest-earning savings instrument purchased for a fixed period of time, such as 6 months or 1, 2, or even 5 years.
Have to leave funds in for a specified time

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16
Q

Define MMA

A

Money Market Account

More interest than savings, some check writing

17
Q

Define inflation.

A

When the amount of spending and income grow faster than the production of goods: when prices rises its inflation.

18
Q

What is APY?

Explain.

A

APY = Annual percentage yield.

The total interest that would be received on a $100 deposit for a year.

19
Q

What type of institutions allow me to manage my money?

A

Commercial Banks
Savings Banks
Credit Union
Mutual Savings Banks

20
Q

Commercial banks…?

A

Accepts deposits in checking and savings account and provides transactional services such as making business loans and offer basic investment products.

21
Q

Savings Institutions…?

A

Thrift Institution
Accepts deposits and provide mortgage and personal loans
Focuses LESS on commercial loans

22
Q

What is the FDIC?

A

Insures deposits, both principal amounts and accrued interest, up to $250,000 per account for most accounts

23
Q

Credit union…?

A

Not-for-profit institutions that accepts deposits and make loans
also Member / Owners all share some common bond, such as having the same employer, working for or attending the same school, living in same community ect.

24
Q

Monetary Assets

A

include cash and other financial assets that can be converted easily into cash. This characteristic of being easily converted into cash is known as liquidity.

25
Q

What is an Adjusted Gross Income (AGI)

A

Amount after subtracting adjustments

Personal Finance (1 decks)

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