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Financial Planning : Financial Goals
Terms in this set (48)
something specific that you want to achieve in the future
a goal that you work for over a long period of time. Long-term goals can take many months or even years to accomplish.
5 years or more
goals that take less time to accomplish
are your own individual goals that you want to accomplish.
values that you want to live up to; they guide your behavior, attitude and interactions with others
are goals that are specifically related to money; usually involve saving or earning money in order to do or buy something.
common financial goal
college, buying a house
when you pay to use something that belongs to someone else.
the point in a person's life when they stop working full-time.
Saving money over the course of your lifetime so that your needs will be met after you retire is a common long-term financial goal.
In the U.S., most people retire at some point after the age of 62.
A 401(k) account
a type of retirement savings account set up by employers for their employees
a way of organizing your finances so you'll be able to set and meet financial goals, while making sure you have enough money to spend on things you need.
helps you break a long-term financial goal into shorter-term steps that will help you meet the goal
A financial plan
The first step in making a financial plan
is prioritizing your goals to determine which ones are the most important
is ranking things in order of importance
you'll need to assess your finances
To figure out if your financial goals and dates are realistic
include the money you have, the money you earn and receive, and the things you own that are worth money
Financial resources are also called
is money that you earn or receive
include money you have and things you own that are worth money
are things you spend money on
are expenses you've planned for
food, electricity and water
are easy to predict and plan for when you analyze your finances
are expenses that you didn't predict
usually occur when something goes wrong or when things don't go as you planned
car breaks down, get hurt and have medical bills, your house catches on fire
is money, goods, or services that one person owes to another person or institution, like a credit card company or bank
If you have debt
paying it off will probably be one of your first financial goals.
The longer you wait to pay off certain kinds of debt
the more money it will cost you in interest
is an extra fee that a borrower must pay to a lender
is a guess or estimate about what something will be like in the future
You can make financial projections by
considering what you expect to happen to your finances in the future.
is the chance that something negative might happen
If a risk has a negative outcome
it is likely to create an unexpected expense
is a type of risk protection that you can purchase from an insurance company, also called an insurance provider
An insurance premium
is the amount that you must pay the insurance company in order to get insurance.
usually is paid in regularly monthly or yearly payments
In return for the premium that you pay to the insurance company
the insurance company agrees to pay for the costs if the risk turns out to have a negative outcome
is the amount that the insurance company is willing to pay
There may be a maximum amount the insurance company will pay
or it may agree to pay all costs above a certain amount
You may be required to pay a percentage of the costs or to pay all costs under a certain amount
It's important that you understand when you'll have to pay costs, and how much of them you'll need to pay
There are many types of insurance,
such as health insurance for medical expenses, car insurance, homeowners' insurance, life insurance, and so on.
is a legal document that states what you want to have happen to your finances after your death
usually states how your financial resources and assets should be distributed; helps make sure your finances will be managed in the way you want them to be.
is an amount of money you've set aside in case of an emergency
After you assess your finances, you may need to change your priorities or the dates when you expect to achieve your goals
Or you may decide to change your finances so that your goals can be achieved
THIS SET IS OFTEN IN FOLDERS WITH...
Financial Planning : Income & Taxes
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