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Financial Literacy Basics

Terms in this set (33)

entitlement
government program that provides financial benefits to eligible citizens based on their legal rights
opportunity cost
value of the option you give up
standard
established measure of quality, value, or quantity
technology
application of science and research to human life and environments
resource
tools you can use to reach your goals
marginal analysis
measures the added benefit, versus the added cost, of one more unit of a product
goal
objective to be attained in specific amount of time
cost-benefit analysis
a method of weighing the costs against the benefits of an action, a purchase, or a financial decision
values
influences the way you live and think as well as your decisions and behavior
management
the process of organizing and using your resources to achieve predetermined objectives
personal financial planning
The process of setting financial goals and developing plans to reach them while meeting financial needs.
needs
necessities a person must have to survive
ethics
moral principles or beliefs that direct a person's behavior
law of diminishing marginal utility
states that the marginal benefit of using an additional unit of something decreases as the quantity used increases
personal information manager (PIM)
system used to acquire, organize, maintain, retrieve and use information
tangible items
Items that can be seen, touched, and usually kept in your possession
Tradeoff
the choice you make when you give up one choice over another
wants
Things a person may like to have but which are not critical for survival.
culture
beliefs, behaviors, and other characteristics common among a group or society
service
paying to have your hair cut, lawn mowed, taxes files, or house clean are all examples
Recession
consumers spend less and save more and unemployment rises
inflation
the value of a dollar goes down as prices rise, making buying power lower
Financial Competence
Having the ability to understand basic topics related to finance such as wisely making, spending, and saving money.
financial plan
individuals current financial position and strategies to meet future financial aspirations
marginal benifit
the additional benefit to a consumer from consuming one more unit of a good or service
marginal cost
the change in total cost of using one more unit
systematic decision making
a process of choosing a course of action after evaluating available information and weighing the costs and benefits of alternative actions and their consequences
economic condition
the state of the economy at a given time
interest
the amount that is paid for using money
demographics
the statistical characteristics of populations and population segments, especially when used to identify consumer markets
Culture
beliefs, behaviors and other characteristics common among members of a society
media
forms of communication designed to reach a large number of people
globalization
worldwide spread and intergration of products, markets, communications and technology
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