Chapter 1 - Personal Financial Planning in Action Flashcards
What is financial literacy?
the use of knowledge and skills for earning, saving, spending, and investing money to achieve personal, familial, and community goals
What factors influence financial literacy?
information, knowledge, attitudes, abilities, actions, and behaviors
What is personal financial planning?
the process of managing your money to achieve personal economic satisfaction
What is a financial plan?
a formalized report that summarizes your current financial situation, analyzes your financial needs, and recommends future financial activities
What is the adult life cycle?
the stages in the family situation and financial needs of an adult
What are values?
ideas and principles that a person considers correct, desirable, and important
What is economics?
the study of how wealth is created and distributed
What is inflation?
a rise in the general level of prices
What are the two main factors to Americans having financial problems?
poor planning and weak money management skills, and overconsumption and overbuying.
What is the time period associated with short-term goals?
within the next year or so
What is the time period associated with intermediate goals?
two to five years
What is the time period associated with long-term goals?
five or more years
Saving for a vacation or paying off small debts would be considered a…
short term goal
Saving to buy a larger purcahse such as a new phone, computer, appliances would be considered a…
intermediate goal
Saving for retirement, college funds, education, purchasing property would be considered…
long-term goals
