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Personal Finance Chapter 1 and 2

Terms in this set (79)

Tangible items that can be touched, used, and purchased are _____.
goods
Ethical behavior calls for honesty. Which of the following actions could be considered ethical?
Studying for a test with a friend.
Which of the following is an example of a human resource?
knowledge
When one goal must be achieved in order to achieve another goal, the two goals are _____.
interdependent
What decision-making strategy weighs the costs against the benefits of an action, purchase, or financial decision?
cont-benefit analysis
What is the first step of systematic decision-making?
Define the decision to be made.
The correct order for the three stages of management are _____.
planning, action, and evaluation
Forms of communication designed to reach a large number of people refers to _____.
media
Social Security, Medicare, and Medicaid are examples of what?
entitlements
____ gives you access to a vast diversity of goods and services through worldwide market
globalization
Overview of an individual's current financial position and strategies to meet future financial aspirations.
financial plan
Having the ability to understand basic topics related to finance.
financial competance
Value of the option you gave up.
opportunity cost
Process of organizing and using resources to achieve predetermined objectives.
management
Intangible activity that another person usually performs for a fee.
service
Change in total benefit of using one additional unit.
marginal benefit
Statistical characteristics of a population.
demographics
Value or goal that is given more importance than other values and goals.
priority
Period of rising prices.
inflation
Possession of a body of financial knowledge, a set of basic skills, and the ability to apply knowledge and skills to making informed, responsible financial choices.
financial literacy
Supply of something that can be used when needed.
resource
Things a person desires but can live without.
want
State of the economy at a given time.
economic conditions
States that the marginal benefit of using each additional unit of something tends to decrease as the quantity used increases.
law of diminishing marginal utility
Overall structure of values and goals that guides a person's behavior and provides a sense of direction in life.
value system
The process of setting financial goals and developing plans to reach them while meeting financial needs is
personal financial planning
Food, clothing, and shelter are examples of
needs
A(n) _____________________________________________ is an individual who purchases goods and services for his or her own use.
consumer
_____________________________________________ are principles and beliefs that a person considers important.
values
Moral principles or beliefs that direct a person's behavior are
ethics
A(n) _____________________________________________ is an established measure of quality, value, or quantity.
standard
An objective to be attained in a specific amount of time is a(n) _____________________________________________.
goal
A(n) _____________________________________________ shows that it is in your interest to take an action or make a purchase only if the benefits are at least as great as the costs.
cost benefit analysis
The change in total cost of using one more unit is the _____________________________________________.
marginal cost
A(n) _____________________________________________ is the choice you give up when you make one choice over another.
trade off
The process of choosing one course of action after evaluating available information and weighing the costs and benefits of alternative actions and their consequences is _____________________________________________.
systematic decision making
A(n) _____________________________________________ system is one that individuals can use to acquire, organize, maintain, and use information.
personal information management (PIM)
A(n) _____________________________________________ is a period of slow or no economic growth.
recession
Money paid for the use of money is _____________________________________________.
interest
The beliefs, behaviors, and other characteristics common among members of a group or society is ____________________________________________.
culture
Planning to buy a car in one year is an example of a _____ goal.
medium term
Monthly rent payments are an example of a(n) _____ expense.
fixed
Data _____ is the process of studying data with the goal of discovering new information that can help with making decisions.
analysis
When a budget period ends, fill in the _____ column and total each section.
actual
In a cash flow statement, what are expenses called?
cash outflow
Cash and savings that can be converted to cash quickly and easily are _____.
current assets
Obligations to be paid over a long period of time are _____.
long-term liabilities
In what stage of the family life cycle does marriage usually occur?
beginning stage
In what stage of the family life cycle does retirement usually occur?
aging stage
Amount of money that can be easily accessed in case of a job layoff, illness, or unexpected expense.
emergency fund
Amount spent for an item that a person could do without.
discretionary expense
Money that remains after a person has paid all of his or her expenses.
discretionary income
Goal that you want to reach today, next week, or in two or three months
short-term goal
Process of setting up an organized system for important documents.
recordkeeping
Personal financial strategy that can help you save money.
pay yourself first
Donation of money or other property.
charitable contribution
Goal that may take several years to achieve.
long-term goal
Major problem that changes a person or family's lifestyle and future.
personal financial crisis
Financial obligation that requires future payment.
liability
Development of a strategy to meet a person's financial needs over the course of his or her lifetime.
nature of financial planning
Behaving with sensitivity to social, environmental, and economic issues.
social responsibility
Computer program used to organize daily finances and keep track of income, spending, saving, debts, investments, and other financial data.
money management software
Set amount that must be paid each budget period.
fixed expense
Difference between what is owned and what is owed.
net worth
A(n) ______________________________ is the time between birth and death.
lifespan
A plan for the use of money over time is a(n) ______________________________.
budget
A(n) _______________________________ may take one to three years to achieve.
medium-term goal
Any form of money received is ______________________________.
income
A(n) ______________________________ is a cost that changes in both the amount and time it must be paid.
variable expense
To have ______________________________ is to have an abundance of money and other assets.
wealth
An organization that aids people in need is known as a(n) _____________________________.
charity
A(n) ______________________________ is the difference between the budgeted amount and the actual amount.
variance
A(n) ______________________________ statement summarizes the amount of money received and the amount paid for goods and services during a specific period.
cash flow
An item of value that is owned is a(n) ______________________________.
asset
A(n) ______________________________ statement that is a written record of an individual's current financial situation.
net worth
______________________________ is the ease with which an asset can be converted into cash without losing value.
Liquidity
A(n) ______________________________ document can be filed with a court officer or used to uphold an agreement in a court of law.
legal
Beginning, expanding, developing, launching, and aging are the stages in the ______________________________.
family life cycle
______________________________ in the life cycle are patterns that differ from typical families.
variations
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