Econ Test 1

Question 1

The process of defining goals, developing a plan to achieve them, and putting that plan into action

Answer 1

Financial Planning

Question 2

Essentials

Answer 2

Needs

Question 3

Increase the quality of living

Answer 3

Wants

Question 4

Beliefs and practices in life that are important to me

Answer 4

Values-they help a person define needs and wants

Question 5

A destination acquired by taking certain steps

Answer 5

Goal

Question 6

S.M.A.R.T. Goals

Answer 6

Specific
Measurable
Attainable
Realistic
Time-bound

Question 7

Patience to achieve and a willingness to give up something you want now in return for something better later

Answer 7

Delayed Gratificiation

Question 8

Measure of money you receive and spend

Answer 8

Cash FLOWWWW

Question 9

Choosing one option that may mean giving up altogether another goal (also called a “trade-off”)

Answer 9

Opportunity Cost

Question 10

A legal way for a person to walk away from paying some or all of their bills

Answer 10

Bankruptcy

Question 11

T/F Jobs are long term, Careers are short term

Answer 11

False; Jobs are short-term, Careers are long-term

Question 12

A person who creates a business from scratch based on a need or personal expertise and puts creativity and ingenuity into action to provide either a service or product; these people are willing to take a risk

Answer 12

Entrepreneur

Question 13

Additional benefits offered by employers

Answer 13

Employee benefits
Examples:
Paid Vacation
Insurance (health, supplemental)
Sick Leave
Maternity Leave
Reimbursement for school
Stock
Employee Discounts
Retirement

Question 14

Includes rent/home cost, trasnportation, insurance, utilities, food

Answer 14

Cost of living

Question 15

T/F When looking at a career/job it’s important to compare salaries, benefits, and cost of living

Answer 15

True

Question 16

A plan for managing money during a given period of time

Answer 16

Budget

Question 17

The total amount of income from your wages or salary before payroll deductions

Answer 17

Gross income

Question 18

The amounts subtracted from gross income, resulting in net income

Answer 18

Payroll Deductions

Question 19

Fees placed on income, property, or goods to support government programs

Answer 19

Taxes; These are the biggest payroll reductions

Question 20

What are the 4 common payroll deductions?

Answer 20

1. Federal Income Tax
2. State Income Tax
3. Social Security (FICA)
4. Medicare Tax

Question 21

Fee collected by the employer and paid to the IRS (Internal Revenue Service to fund federal government programs

Answer 21

Federal Income Tax

Question 22

Fee collected and paid to state revenue departments to support state programs

Answer 22

State income tax

Question 23

Collected to fund programs for the elderly, survivors, and disabled

Answer 23

Social Security (FICA)

Question 24

Tax collected that funds hospital services for old people

Answer 24

Medicare

Medicaid is for the poor

Question 25

Your “take-home” pay, the money you get after subtracting deductions

Answer 25

Net Income

Question 26

How you control how much federal tax is withheld from your paycheck

Answer 26

Form W-4

Basically: The more allowances, less is withheld, but you will have a higher amount owed at the end of the year.

Question 27

Shows your total amount earned from an employer and a detailed summary of withheld taxes. Get it by January 31, use it to file taxes by April 15.

Answer 27

Form W2

Question 28

What’s the difference in fixed and changing expenses?

Answer 28

Fixed expenses don’t change (ex. mortgage, car payment, insurance payments)
Changing expenses change (duh…ex. eating out, movies, entertainment)

Question 29

PYF, a very baic and effective savings plan-make saving a fixed expense

Answer 29

Pay Yourself First