Personal Finance Ch. 1-3

Personal Fiance Planning arranging to spend, save, and invest money to live comfortably, have financial security, and achieve goals.
Goals Things you want to accomplish
Values Beliefs and principle you consider important, correct, and desirable
Opportunity cost what is given up when making one choice instead of another
Liquidity the ability to easily convert financial assets into cash without loss in value
Service a task that a person or a machine performs for you
Good a physical item that is produced and can be weighed and measured.
economics the study of decisions that go into making, distributing, and using goods and services.
Economy the ways in which people make, distribute, and use their goods and services
Supply the amount of goods and services available for sale
demand the amount of goods and services people are willing to buy
Federal Reserve System the central banking organization of the United States
Inflation rise in the level of prices for goods and services
consumer a person who purchases and uses goods and services
interest the price that is paid for the use of another’s money
time value of money the increase of amount of money due to earned interest and dividends
principal the original amount of money you deposit
Future Value the amount your original deposit will be worth in the future based on earning a specific interest rate over a specific period of time
Annuity term sometimes used for a series of equal regular deposits to a savings accounts
present value the amount of money you need to deposit now in order to have desired amount in the future
job work you do mainly to earn money
career a commitment to work in a field that you find interesting and fulfilling
standard of living measure of life based on the amounts and kinds of goods and services a person can buy
trends developments that make changes in a particular area
Potential earning power the amount of money you earn over time
Aptitudes the natural abilities people possess
Interest inventories tests that help you identify the activities you enjoys the most
demographic trends tendencies of people grouped by age, gender, ethnicity, education, or income that changes over time
geographic trends tendencies of people moving from one area of the county to another as financial centers shift location
service businesses that provide services for a fee
internship a person in which a person receives training by working with people who are experienced in a particular field.
Cooperative education a program that allows students to enhance classroom learning with part-time work related to their majors and interests
Networking making and using contacts to get job information and advice
informational interview a meeting with someone who works in your area of interest who can provide you with practical information about a career or company of interest
Resume one or two page summary of your education, training, experience, and qualifications
Cover letter a personal letter you present along with resume
cafeteria style employee benefits programs that allow workers to choose the benefits that best meet their personal needs
pension plan a retirement plan that is funded at least in part by an employer
mentor an experienced employee who serves as a teacher and counselor for a less-experienced person
Money management planning to get the most from your money
safe-deposit box a small, secure storage compartment that you can rent in a bank
personal financial statement a document that provides information about an individual’s current financial position and presents a summary of income and spending
personal balance sheet assets-liability
net worth the difference between the amount that you own and the debts you owe
assets items of value that individual or company owns, including cash, property, personal possessions, and investments
wealth an abundance of valuable material possessions or resources
liquid assets cash and items that can be quickly converted to cash
real estate land and any structure that are on it, such as a house or other building, that a person or family owns
market value price at which property will sell
Liabilities the debts you owe
insolvency a financial state that occurs if liabilities are greater than assets
cash flow amount of cash that is available at any given time
income cash inflow or the money you recieve
take-home pay the amount of income left after taxes and other deductions are taken out of your gross pay
discretionary income the money left after paying for the essentials, such as food, clothing,shelter, transportation, and meditcation
surplus extra money that can be spent or saved depending on a person’s financial goals and values
deficit the financial situation that occurs when more money is spent that is earned or received
budget a formal, written statement of expected income and expenses for a future period of time
consumer price index a measure of the changes in prices for commonly purchased goods and services in the united States
budget variance the difference between the budgeted amount and the actual that you spend.

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