Personal Finance

the process of managing your money to achieve personal economic satisfaction is personal finance planning
advantage of personal financial planning: increased effectiveness in obtaining, using, and protecting _______ ______. financial resources
advantage of personal financial planning: increased _______ of financial affairs. control
advantage of personal financial planning: improved personal _______ relationships
advantage of personal financial planning: sense of _______ from financial worries freedom
how many steps are there in the financial planning procedure? six
an _______ ___ is what you give up when you make a choice. opportunity cost
the cost, or trade-off, of a decision cannot always be measured in dollars. sometimes the cost is your _____ time
gathering info from financial planning sources is the best way to minimize ______ risk
how often should you review and/or revise your financial plan? this is in terms of a regular situation, with no change in personal, social, and economic factors, which would beg a more frequent review. at least once a year
chapter 1 objective 2: develop personal financial goals. financial goals can be influenced by two things. these are time fram and/or _______. financial need
chapter 1 objective 2: develop personal financial goals. financial goals influenced by time frame are divided into three groups. short term, intermediate, and long term. _____ _____ goals should be planned in coordination with the other two. long term
goals developed for different_______ ______can be divided into three groups; consumer product goals, durable product goals, and intangible purchase goals financial needs
chapter 1 objective 2: develop personal financial goals________ products are things we buy on a daily basis, such as food or movie tickets consumer
chapter 1 objective 2: develop personal financial goals_______ produce are more expensive items that we buy every once in a while, such as TVs or ipods durable
chapter 1 objective 2: develop personal financial goals_______ purchases are things that would be difficult to replace, such as a house or a car intangible
specific, measurable, action-oriented, realistic, time-based; this is the SMART model which helps to guide our ____ setting goal
chapter 1 objective 3: assess personal and economic factors that influence personal financial planningthis objective deals with the _____ life cycle stage. personal factors in this stage include marital status, household size, employment, and major events such as graduation, children, and marriage adult
_______ is the study of how wealth is created and distributed economics
chapter 1 objective 3: assess personal and economic factors that influence personal financial planningthis objective deals with economic and personal factors, as well as ______ influences global
chapter 1 objective 3: assess personal and economic factors that influence personal financial planningglobal influences included in this section include the balance of ____ and ____, foreign investments, the level of money supply, and the competition between American and foreign companies. exports, imports
chapter 1 objective 3: assess personal and economic factors that influence personal financial planning.the level of money supply affects _____ rates interest
chapter 1 objective 4: calculate time value of money situations associated with personal financial decisions.every financial decision involves ______ ___ something to obtain something else. giving up
time (most important), health, leisure; these are personal opportunity _____ costs
increases in an amount of money as a result of interest earned is defined as the _____ (or interest) time value of money
what three amounts are required in order to calculate the time interest of money (or interest)? principle, interest rate, time
what is the formula for calculating the time interest of money (or the interest) P x R x T
how to compute simple interest; amount in savings x annual interest rate x _____ = interest time period
_____ ______ of a single amount is the amount to which current savings will increase based on a certain interest rate and a certain time period. this is also called COMPOUNDING – earning interest on previously earned interest. future value
future value of a SERIES of deposits is called an ______ annuity
the ______ ______ of a single amount is the current value of a future amount based on a certain interest rate and a certain time period. this is also called DISCOUNTING. present value
the ________ _____ of the amount you want in the future will always be less than the future value. present value
present value can be computed for a single amount or for a _______ of deposits series
chapter 1 objective 5: identify strategies for achieving personal financial goals for different life situations.the components of ______ ________ planning are; obtaining, planning, saving, borrowing, spending, managing risk, investing, and retirement and estate planning. personal financial
a ______ plan is a formalized report that summarizes your current financial situation, analyzes your financial needs, and recommends future financial activities. financial
some good financial habits to develop include using a well-conceived spending plan, becoming informed of tax and investment alternatives, and having appropriate ______ coverage to prevent financial disasters. insurance
chapter 2 objective 1: describe the activities associated with career planning and advancementthe average person changes jobs more than ___ times over a lifetime. 7
a ____ is an employment position obtained mainly to earn money.a _____ is a commitment to a profession that requires continued training. job, career
the level of career training affects _______ success. for example, a 2 yr degree makes about 1.4 million more in a lifetime than someone who dos not have a degree. 4 yr degree makes about 2.4 million more, and a masters makes about 2.8 million more. financial
career training is divided into two main categories; _______ skills and _____ skills technical, general
________ skills refer to specialized career training for a specific profession. technical
_______ skills are traits adaptable to most work situations. some can be acquired at school, while others require experience. general
chapter 2 objective 2: evaluate factors that influence employment opportunities. social influences include demographic trends and _______ trends. geographic
chapter 2 objective 2: evaluate factors that influence employment opportunities. _______ conditions include interest rates, inflation, and consumer demand economic
chapter 2 objective 2: evaluate factors that influence employment opportunities. industry trends include foreign competition, and the changing uses of _______ technology
chapter 2 objective 2: evaluate factors that influence employment opportunities. ________ trends in career opportunities include statistics like longer life spans and being a working parent, because longer life spans means higher demand for things like health care, and being a working parent means demand for healthcare and food service. demographic
chapter 2 objective 2: evaluate factors that influence employment opportunities. where jobs are; salaries, and living costs are things associated with ______ trends in career opportunities. geographic
chapter 2 objective 2: evaluate factors that influence employment opportunities. high interest rates, price increases, and decreased demand for goods and services are things that affect career opportunities in terms of ______ conditions. economic
chapter 2 objective 3: implement employment search strategies.some good ways of obtaining ________ _______include part-time employment, volunteer work, internships, and campus projects employment experience
_______ is the process of making and using contacts to obtain and update career information. the main sources of doing this include business contacts, professional organizations, and community organizations. networking
in networking, you should prepare a _____ second summary of abilities 30
applying for _________ requires at least these three things; a resume, cover letter, and an interview. employment
chapter 2 objective 4: assess the financial and legal concerns related to obtaining employment.you should ALWAYS do this before accepting an employment position research
chapter 2 objective 4: assess the financial and legal concerns related to obtaining employment.the two BIGGEST factors affecting salary are _______ and _______ ____ education, company size
chapter 2 objective 4: assess the financial and legal concerns related to obtaining employment.some _______ benefits include child care, leaves of absence, and elder care. nonsalary
______-style benefits allow workers benefit credits which they can choose to meet their needs. cafeteria
_____ spending is a great employee benefit, but you better “use it or lose it” flexible
a _____ is an experienced employee who serves as a teacher and counselor for a less experienced person. they are attracted to those who show initiative and they should be receptive to assisting others and help in both technical and social areas of their careers. mentor
about __ million career moves occur each year 10
a _____ should include a personal data section, a career objective section, an education section, an experience section, a related information section, and a references section. resume
the 4 different types of resumes are chronological, functional, targeted, and e-resumes
a ______ resume is the most common. it focuses on experience and education in reverse-time sequence. chronological
a _______ resume focuses on your skills functional
a ______ resume is prepared for a specific job targeted
a ______ resume uses a simple format with no attachments. e-resume
use the STAR principle to highlight experiences and achievements when making your resume. STAR stands for____ situation, task, actions, and result
a ____ ____ should have three paragraphs; an intro, development, and conclusion. cover letter
the ____ paragraph of a cover letter should get the readers attention and provide an overview of your qualifications. intro
the _______ paragraph of a cover letter should specify your qualifications, refer to details on resume, and describe experiences and training development
the _________ paragraph of your cover letter should ask for an interview, include contact info, and summarize how you can help the company. concluding
when preparing for a job interview, get info about your prospective employer, prepare questions to ask, and practice interview skills. during an interview NEVER ask about _____ salary
Chapter 3 objective 1: recognize relationships among financial documents and money management activities.daily ______ and ______ decisions are the heart of financial planning. spending, saving
______ ____________ is the day-to-day financial activities needed to manage personal economic resource, while working toward long-term financial security. money management
______ is the most important way of maintaining personal financial records. organization
according to the textbook, you should keep copies of tax returns and supporting data for ____ years. according to decosmo, you should keep personal tax returns for ___ years. 6,3
chapter 3 objective 3; develop a personal balance sheet and cash flow statement.the purpose of ______ _______ statements is to measure progress toward your financial goal, maintain info on financial activities,report current financial position in relation to the value of items you own and the amounts you owe. personal financial
the _______ sheet also called the net worth statement or statement of financial planning balance
preparing a balance sheet requires 3 steps; listing items of ____, determining the amounts ____, and computing net _____ value, owed, worth
____ are things you own assets
______ are what you OWE liabilities
step 1 of preparing a balance sheet is listing items of value. these include assets and ______ assets liquid
_______ ______ are cash or anything that can be turned into cash within the next year, like real estate, personal possessions, or investment assets. liquid assets
step 2 of preparing a balance sheet is determining the amounts owed. these are your ______ or things you owe. current _____ are <1yr. anything over that is long term. liabilities
step 3 of preparing a balance sheet is computing net worth. two ways of finding this:assets – liabilites = net worthor ….. assets = net worth + liabilities
____ ____ is an indication of the financial position at any given date. net worth
_____ ____ statement, or the personal income and expenditure statement, is the actual inflow, outflow for a given time period. cash flow
to find cash flow (refers to a time period):total cash received – cash _____ = cash surplus (deficit) outflows
there are three steps for preparing a cash flow statement; 1, record _____ 2, record cash _______ 3, determine ____ ____ flows income, outflows, net cash
a _______ is a spending plan budget
_____ are subject to change. budgets
about ______ of each dollar you earn goes to pay taxes. 1/3
an effective ___ _______ is vital for successful financial planning. tax strategy
take advantage of tax benefits while paying your fair share of taxes. this is called tax planning
there are ___ types of taxes four
the four types of taxes are… purchases, property, wealth, earning
types of income subject to taxation include:earned income, investment income, passive income, and other. passive income is….. from business activities
_____ income is your net income after deductions taxable
exclusions are…. amounts not included in gross income
this kind of income cannot be taxes tax exempt
this kind of income will be taxed at a later date tax deferred
adjusted gross income (AGI) is gross income after certain reductions have been made. these reductions are called adjustments to income. these include things like…. student loans
a ____ ______ is an amount subtracted from the AGI to arrive at a taxable income tax deduction
itemized deductions are things like medical and dental expenses, mortgage interest, etc. itemized deductions are only in the ____ ____ long form
an ______ is a deduction for yourself, your spouse, and qualified dependents exemption
a person’s _____ tax rate is based on the total tax due divided by taxable income. this rate is less than the person’s marginal tax rate. average
a _____ ____ is an amount subtracted directly from the amount of taxes owed, such as earned income, child, and dependent credits. tax credit
the five filing status categories are…. single, married jointly, married separately, head of household, widow
the 1040ez is the quickest and easiest to file. for singles or marrieds jointly, no more than $_____ taxable interest. and no more than $______taxable income. do not itemize or claim adjustments. 1500, 100000
tax form ____ – taxable income less than $100,000, adjustments allowed, tax credits for child care and dependent care. 1040A
tax form _____ – required to us this if income is over $50,000; use to itemize deductions 1040
tax form_____ – used to amend a previously filed return 1040x
about __% of all returns are audited 1
there are ___ types of audits 3
you have _____ _____, including time to prepare for the audit and clarification audit rights
tax ______ is the legitimate method to reduce your tax obligation to your fair share and no more avoidance
tax ____ is the illegal act of not paying the taxes you owe, such as not reporting all income evasion

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