Personal Finance Basic Terms

Question 0

Financial Security

Answer 0

is the ability to meet essential needs without taking on more debt than you can pay

Question 1

Financial Planning

Answer 1

Helps reach important goals and financial security over lifetime

Question 2

Financial Literacy

Answer 2

Is possessing and applying financial knowledge to make informed and responsible financial choices

Question 3

Management

Answer 3

Using your resources to achieve predetermined objectives
Management involves:
-identifying resources
-Setting goals
-Making decisions
Solving Equations
-Evaluating the results

Question 4

Goods

Answer 4

Are tangible items that can be purchased

Question 5

Services

Answer 5

intangible activities that another person usually performs for a fee

Question 6

Needs

Answer 6

Necessities

• Physical Needs (food, clothing, shelter)
• Psychological needs (safety, security, love acceptance, approval, and success)

Question 7

Wants

Answer 7

Things you would like but are not essential

Question 8

Value

Answer 8

Are your beliefs about what is important and desirable

Question 9

Value System

Answer 9

Is the overall structure of values and goals that guides your behavior

Question 10

Ethics

Answer 10

Are the moral principles or beliefs that direct a person’s behavior

• Ethical behavior is important in personal relationships and in business and government
• Honesty, fairness reliability, respect, courage, tolerance, civility, and compassion
• Unethical behavior is usually considered wrong and is sometimes illegal

Question 11

Goal

Answer 11

Objective you want to attain

• “to be” goals are related to personal and character (smart, reliable, career goals, etc.)
• “to do” goals are things you want to accomplish (play piano, go to college, clean your closet, etc.)
• “To have” goals continually change (New clothes, new car, new phone, etc.)

Question 12

Short term goals

Answer 12

Takes less than a year to achieve

Question 13

Medium- term goals

Answer 13

May take one to three years to achieve

Question 14

Long-term goals

Answer 14

may take several years to achieve

Question 15

Interdependent Goal

Answer 15

A goal you have to achieve in order to reach another goal

Question 16

Conflicting goals

Answer 16

Cannot all be achieved; you must decide which of the goals is more important to you

Question 17

Priority

Answer 17

Is a value or goal that is given more importance than other value and goals

Question 18

Standard

Answer 18

Is an established measure of quality, value, or quantity

• You can set standards for the way you want to live, what you want to do, and what you want to buy
• Your standards depend on your values and goals

Question 19

Resources

Answer 19

Tools that you can use to reach your goals

• Human resources are internal (knowledge, experience, skills, motivations, ect.)
• Non human resources are external (money, time, equipment)
• Scarce
• Manageable
• Related to one another