Vocabulary
Personal financial planning
the process of setting financial goals and developing plans to reach them while meeting financial needs.
Goods
are tangible items that can be touched, used, and purchased, such as food or clothing.
Standard
an established measure of quality, value, or quantity. The word “standard” is used in many ways.
Marginal cost.
The change in total cost of using one more unit
Management
the process of organizing and using resources to achieve predetermined objectives.
Financial plan
an overview of an individual’s current financial position and strategies to meet future financial aspirations.
Values
principles and beliefs that a person considers important.
Resource
a supply of something that can be used when needed.
Trade-off
the choice you give up when you make one choice over another.
Recession
a period of slow or no economic growth. It can have a major impact on personal money management.
Needs
necessities a person must have to survive. Examples include physical needs for food, clothing, and shelter.
Value system
the overall structure of values and goals that guides a person’s behavior and provides a sense of direction in life.
Goal
an objective to be attained in a specific amount of time.
Opportunity cost
the value of the option you gave up.
Interest
the amount that is paid for using money.
Wants
things that a person desires but can live without.
Ethics
the moral principles or beliefs that direct a person’s behavior.
Cost-benefit analysis
a method of weighing the costs against the benefits of an action, a purchase, or a financial decision.
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.
Personal information management (PIM)
a system that individuals use to acquire, organize, maintain, retrieve, and use information.
Consumer
an individual who purchases goods and services for personal use.
Priority
a value or goal that is given more importance than other values and goals.
Marginal benefit
The change in total benefit of using one additional unit
Law of diminishing marginal utility
states that the marginal benefit of using each additional unit of something tends to decrease as the quantity used increases.
Economic conditions
the state of the economy at a given time.