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Scenarios
Financial Decision Step
Budgeting
Vocabulary
Random Questions
100
What should you do after giving someone a check?
Keep record of it and write it in your check book
100
What is step one in the financial decision making process?
1. Determine your financial situation
100
What is budgeting?
A budget is a plan for using your income in a way that best meets your wants and needs. It includes a record of your expected income, your planned expenses, and your planned savings over a certain period of time.
100
What is the definition of GOALS?
Things you want to accomplish
100
What is personal financing?
It is spending, saving and investing your so you can enjoy the kind of life you want, along with financial security.
200
You get robbed, and the robber takes only cash. What do you do?
Beat up the robber and get your money back.
200
When do you use the financial decision making process?
Really you should use it all the time but especially when you are buying things that cost a lot of money, like a car or new house.
200
What are ways to managing your expenses?
Writing it in a check book, looking at your credit card bank statements regularly and allowing a certain amount of money for yourself for a week.
200
Definition of expense?
Amount of money used to buy or do something
200
In step 4 of making a financial decision, what do you take in consideration?
You look into different sources and think about your financial situation now and your personal beliefts
300
You are an old woman, and you loss you purse at the grocery store. Someone finds it and starts spending all your retirement money. What do you do?
Cancel your credit card and report it to the bank?
300
How does the financial decision making process benefit you?
It keeps your spending's in check and helps you with your retirement funds and other expenses.
300
What are the three interest calculations?
• The amount of the savings(commonly called the principal). • The annual interest rate. • The length of time the money is on deposit.
300
What is the definition of opportunity cost?
Trade-off, something you give up when you make one choice instead of another.
300
What are the seven steps of budgeting?
1. Set your financial goals 2. Estimate your income 3. Budgeting for unexpected spending and savings 4. Budget for fixed expenses 5. Budget for Variable expenses 6. Record what you spend 7. Review spending and saving problems
400
You were walking down the street and someone shoots you. You struggle and call the ambulance in a hurry. Once you get to the hospital you go straight to surgery and get sent to recovery. After 5 months you are better, but you find out that your medical bills are over the roof and your insurance doesn't want to pay the full cost. What do you do?
You should call a accidental insurance company like Alfac and see if you could work out a plan to make the cost smaller.
400
What does budgeting have to do with the financial decision making process?
A budget is the financial plan for how an organization will receive and spend money for a set time period.
400
What is meant by withholding?
Money subtracted from a worker's paycheck for taxes; if the worker is self-employed, he pays the government himself.
400
What is gross pay and net pay?
Your gross pay is the total amount of money you earned for a specific time and net pay, is your gross pay minus deductions.
400
What is surplus and deficit?
A surplus is extra money that can be spent or saved, depending on a person’s goals and values. A deficit occurs when more money is spent than is earned or received.
500
Your water bill, car insurance and house payment are due this Friday, on top of all that you didn't pay your gas, water and electric bill last week. And you were stupid and went out and bought yourself a 75' plasma TV for $3,500. Your bills added together are $4,700 dollars. What are you going to do?
Sell your TV and get a loan
500
(without looking or cheating) Tell us all the steps in the financial decision making process in your own words, but still in order.
1. Ask yourself – do I really need it or just want it? 2. If you really need it vs. want it – begin to evaluate your options. 3. If you just want it, ask yourself if the purchase will create any unnecessary stress or consequences in your life. If not and you can afford it…go to the next step. 4. Determine what you can afford and stick to your budget. 5. Do some research on the product or service online. 6. Compare options and pricing. 7. If you’re torn between two choices, make a list of the pros & cons of each ( the longest pro list wins.) 8. If the choices are close, choose the one you like best. 9. If you feel uncertain or confused, ask for help. 10. Don’t let anyone pressure you into a decision before you’re ready and feel confident in your choice.
500
What are the seven steps of budgeting?
Step 1: Set Your Financial Goals Step 2: Estimate Your Income Step 3: Budget for Unexpected Expenses and Savings Step 4: Budget for Fixed Expenses Step 5: Budget for Variable Expenses Step 6: Record What You Spend Step 7: Review Spending and Saving Patterns
500
What is the difference between fixed and variable expenses?
Variable expenses can be changed more easily and can be controlled unlike fixed. Fixed expenses are like your insurance, rent and car loan, which occurs regularly.
500
What are the risk of making a financial decision?
Inflation, Interest rate risk, Income risk, Personal risk, and Liquidity risk.