Overview of Personal Finance
The process that involves planning, spending, saving, borrowing, and investing is called
Personal Financial Planning
The process of forecasting future expenses and income
budgeting
Money received is a cash ?
Cash Inflow
What are the two main components of a personal cash flow statement?
Cash inflows and Cash outflows
Mary works 15 hours a week at her job and earns $8.50 and hour. If 12% of her paycheck is taken out for taxes, how much will her weekly paycheck be?
$112.20
What is one example of a liquid asset?
Checking account
Savings account
Piggy bank
How do you calculate net worth?
Assets - Liabilities
The first step in financial decision making is ?
Establish your financial goals
Assets typically owned by a household are called
Household assets
Graham decided to play football this year instead of getting a part-time job. Last year, he earned $1,100 during the football season. This year, he spends $9.00 on food after each game. His team plays a 10-game season. What is his opportunity cost?
$1,190
True or False?
Your car that is for sale is a liquid asset
False
To pay a portion of the cost of the major purchase such as a house or a car is called
finance
An expense that changes from one month or period to the next is
variable
The type of investment that represents fractional ownership of a business or corporation
Stock
Robert plans to take a second job during the summer. His current job pays $80 a week and he works all year. The second job will pay $200 a week for the 15-week summer. How much will Robert make next year?
$7,160
What are three things that you should plan for financially?
Education
Family
House
Car
A common type of investment is a
Stock, bond, mutual funds and real estate
Forecast
The difference between what you predict to happen and what actually happens
Forecast error
Nikki has a car worth $3400 and has $400 in her checking account. If her only debt is $600 that she still owes on the car, what is her net worth?
$3,200
The certification received by Financial Planners
CFP (Certified Financial Planner)
CPA (Certified Public Accountant)
What are three types of insurance people usually have?
Health, Life Insurance, Car Insurance
Identify three sources of financial income
Pay check
Loan
Birthday gift
What are two types of classifications for liabilities?
Current liabilities and Long-term liabilities
How long will it take Brianna to save $1,000 for a down payment on a car if she makes $40 a night babysitting and she typically babysits every Friday and Saturday?
12.5 weeks or 13 weeks!