Ch. 1, 2, 3, & 4 Flashcards
(18 cards)
Determine current financial situation,
develop your financial goals,
identify alternative courses of action,
evaluate alternatives,
create and implement your financial action plan,
review and revise of the financial plan
The six step financial planning process
Specific
Measurable
Action-oriented
Realistic
Time-based
Smart
Take-home pay is also known as
Net pay or disposable income
Storing, creating personal, creating and implementing a plan for spending and saving
Components of money management
SWOT
Strengths / Weakness = Internal
Opportunities / Threats = external
S
W
O
T
Well-planned, realistic, flexible, clearly communicated
Budget
Savings account, payroll deduction, save coins
Savings strategies
Adjusted gross income
AGI
Asset management account or cash management account
Prime rate = rate bank charges large corporations
Simplify your banking
$100 tax credit
Reduces your taxes by $100
$100 tax deduction
Amount of tax reduction is based on your tax bracket
All taxpayers pay the same rate
Flat tax
Taxes a product at each stage in the manufacturing process
VAT = value-added tax
Earns a fixed rate plus and inflation rate.
Twice a year inflation adjustment
I bonds or Tips
Quick availability of cash, without significant loss in value
Liquidity
Regular savings is also known as a
Passbook
Blank endorsement (signature only)
Restrictive endorsement (for deposit only)
Special endorsement (pay to the order of)
Making deposits, three types of endorsements
Not always measurable in dollars, maybe in time. Consider lost opportunities resting from your decisions
The trade off of a decision
