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Ch 6: Cash Flow Planning

Terms in this set (73)

____________ is a matter of projecting the sources of cash and the household uses of it, thereby determining available cash flow for both identifying savings needs and generating free cash flow.
Cash Flow Planning
When targeted savings have been planned properly, ______________ can be used for additional spending today, invested for future spending, or put aside to reduce household risk.
Free Cash Flow
What refers to the schedule of current and future cash needs to achieve household goals?
Cash Flow Planning
____________ can include such objectives as supporting a current lifestyle, paying of credit card debt, and saving for a vacation.
Cash Flow Planning
When we discuss ____________, we are interested in what we do with our money.
Cash Flow Planning
The following are 8 reasons for ____________:

1. The Pure Life Cycle Motive
2. The Investment Motive
3. The Down Payment Motive
4. The Precautionary Motive
5. The Improvement Motive
6. The independence Motive
7. The Bequest Motive
8. The Hoarding Motive
Savings
Which motive for savings provides moneys to even out differences in earnings over time? A key motivation is to build up resources for retirement when work related earnings are no longer available.
Pure Life Cycle Motive
Which motive for savings takes advantage of investment opportunities that can make achieving financial goals easier?
Investment Motive
Which motive for savings provides funds for the down payment or full purchase of longer lived assets such as durable goods or educational expenditures?
Down Payment Motive
Which motive for savings provides a fund to cover future uncertainties such as fluctuating income, sickness, inflationary effects on expenditures, and so forth?
Precautionary Motive
Which motive for savings sacrifices today so that your future lifestyle can improve?
Improvement Motive
Which motive for savings accommodates funds to provide for non-household members whether they are children, other relative, friends, or charities?
Bequest Motive
Which motive for savings accumulates sufficient wealth to be able to be financially independent after working until reaching a certain age?
Independence Motive
Which motive for savings accumulates investment with no intention of converting them into purchases in the future? In effect, pleasure comes from the accumulating the money itself or the power and cachet that having it bring.
Hoarding Motive
What is a method of planning current and future household cash flows to determine needs and adhere to desirable allocations of resources.
Budgeting
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