Chapter 2 Flashcards
Time between birth and death
Life span
Money that remains after a person has paid all of his or her expenses
Discretionary income
Difference between what is owned and what is owed
Net worth
Plan for the use of money over time based on goals, expenses, and expected income
Budget
Set amount that must be paid each budget period
Fixed expense
Development of a strategy to meet a person’s financial needs over the course of his or her lifetime
Nature of financial planning
Process of setting up an organized system for important documents
Record keeping
Abundance of money and other assets
Wealth
Cost that changed both in the amount and time it must be paid
Variable expense
Item of value that is owned
Asset
Software program that formats data in columns and rows and can perform calculations
Spreadsheet
Amount spent for an item that a person could do without
Discretionary expense
Summary of the amount of money received and the amount paid for goods and services during a specific period
Cash flow statement
Computer program used to organize daily finances and keep track of income, spending, savings, debts, investments, and other financial data
Money management software
Any form of money received, such as an allowance, a paycheck, gifts, and gains from an investment
Income
