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personal finance test 1
Terms in this set (34)
knowledge of facts, concepts, principles, and technological tools that are fundamental to being smart about money
Standard of living
material well-being and peace of mind that individuals or groups earnestly desire and seek to attain, to maintain if attained, to preserve if threatened, and to regain if lost.
means that you are accountable for your future financial well-being and that you strive to make wise personal financial decisions.
the job of supervising or taking care of something, such as an organization or property.
the achievement of financial aspirations that are desired, planned, or attempted, as defined by the person who seeks it.
the process by which the cost of goods and services tends to rise over time = when prices rise
gross domestic product- the nation's broadest measure of economic health; it reports how much economic activity ( all goods and services) has occurred within the us borders during given period)
a recurring period of decline in total output, income, employment, and trade, usually lasting from six months to a year and marked by widespread contractions in many sectors of the economy
a time period when credit use shrinks in an economy instead of expanding as during normal economic times= when debt repayments rise faster than incomes
fundamental beliefs about what is important, desirable, and worthwhile
specific objectives addressed by planning and managing finances.
expenses often in the same amount that recur at fixed intervals
Variable expenses (flexible expenses)
expenses over which you have substantial control.
this is an account that is used to set aside funds to be used in an emergency, such as the loss of a job, an illness, or one of life's many "what ifs"
Debt to income ratio
Marginal tax income
this amount is determined by subtracting various exclusions, adjustments, exemptions, and deductions from total income, with the result being the income upon which the income tax is actually figured
all income in the form of money, goods, services, and/or property
Adjusted gross income
AGI, gross income less any exclusions and adjustments
seeking legal ways to reduce, eliminate, or defer, income taxes
deliberately and willfully hiding income from the IRS, falsely claiming deductions, or otherwise cheating the government out of taxes owed; it is illegal
(or personal exemption) a legal permitted amount, an allowance to reduce one's taxable income, based on the number of people supported by the taxpayer's income.
Steps in financial planning
1. Evaluate your financial condition relative to your education and career choice
2. Define your financial goals
3. Develop a plan of action to achieve your goals
4. Periodically develop and implement spending plans to monitor and control progress toward goals
5. Review your financial progress and make changes as appropriate
How to deal with deleveraging
1. Cut spending
2. Reduce debt
3. Redistribute wealth
4. Print money
what to include and avoid in Resume
1. Zero errors
2. Chronological order
3. Skills based
4. Functional resume- easy to read, bullet points
5. Cover letter
6. Strong references- reference letters
Do's/Don'ts in a Interview
1. Positive attitude
2. Awareness of the firm and their goals and/or mission
4. Don't offer information that will hurt your opportunity. Yet, respond accurately to questions.
5. Find positives to negative questions like what is your "biggest weakness"
6. Assemble stories that demonstrate how you successfully carried out a process or the that were not so successful but which you learned valuable insights.
7. Be prepared to solve cases or fictitious situations.
8. Have questions for your interviewer
Benefits from employers - required, optional, what should you look for*
o Paid time off (vacation, holiday, sick days)
o Insurance (medical, disability, life)
o Child care
o Education (tuition reimbursement)
o Parking, car pooling
Differences of Cash Flow Statements, Balance Sheet, and Budget
Cash Flow Statements- Summary of all income and expense transactions over a specific time period.
Balance Sheet-Snapshot of assets, liabilities, and net worth on a particular date.
Budget-Paper or electronic document used to record both planned and actual income and expenditures over a period of time.
assets and liabilities vs income and expenses
assets:Everything you own that has monetary value.
liabilities:What you owe.
total income:Compensation from all sources.
expenses: total expenditures made in a specified time such as reported on a cash-flow statement.
Recommended textbook explanations
Principles of Economics
N. Gregory Mankiw
Krugman's Economics for AP*
David Anderson, Margaret Ray
Krugman's Macroeconomics for AP*
David Anderson, Margaret Ray
Principles of Microeconomics
N. Gregory Mankiw
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