Ch.2- 5 Flashcards
(25 cards)
What are values?
principles, standards, or qualities that you consider desirable
Helpful in career planning
What are the three financial goals and explain?
Short-term goals = to be accomplished within one year
Intermediate-term goals = to be accomplished within 3 to 5 years
Long-term goals = to be accomplished beyond 5 years
What is an income statement?
The Income Statement (Cash-Flow Statement) tracks where your money came from and went.
Income-Expenses = Surplus (net gain) or Deficit (net loss)
Define Stewardship
Properly managing the resources that God has committed to our care.
What is standard of living?
Material well-being and peace of mind that individual or groups earnestly desire and seek to attain,
to maintain if attained,
to preserve if threatened,
and to regain if lost.
What is a balance sheet?
Snapshot of assets, liabilities, and net worth on a particular date.
Assets-liabilities=Net worth
What is a budget?
A written plan to help you live within your means
What are the three major financial statements?
- Balance sheet: Where we are (present)
- Income Statement (Where we’ve been) past
- Budget: Where we’re going (future)
A budget helps you ….?
Manage your money Eliminate waste Predict future needs more accurately Achieve financial goals Prepare for emergencies
Budgets will NOT…?
- Solve all your immediate problems.
- Make you use it.
- Eliminate all decision-making.
- Balance by itself.
What are fixed expenses?
Difficult to change or avoid
Examples: Rent, Automobile loan payments ,Taxes, Insurance
What are variable expenses?
Relatively easy to change
examples:Entertainment, Meals, Medical
What is marginal tax rate?
The tax rate at which your last dollar earned is taxed, and it refers to the highest tax bracket that your taxable income
List a type of bank account.
- NOW-checking (interest earning)
- Savings account
- checking accounts (Transactions)
- Super NOW (limits number of checks)
- Money market account (MMA)
- CD’s
What is a certificate of deposit?
CD’s
An interest-earning savings instrument purchased for a fixed period of time, such as 6 months or 1, 2, or even 5 years.
Have to leave funds in for a specified time
Define MMA
Money Market Account
More interest than savings, some check writing
Define inflation.
When the amount of spending and income grow faster than the production of goods: when prices rises its inflation.
What is APY?
Explain.
APY = Annual percentage yield.
The total interest that would be received on a $100 deposit for a year.
What type of institutions allow me to manage my money?
Commercial Banks
Savings Banks
Credit Union
Mutual Savings Banks
Commercial banks…?
Accepts deposits in checking and savings account and provides transactional services such as making business loans and offer basic investment products.
Savings Institutions…?
Thrift Institution
Accepts deposits and provide mortgage and personal loans
Focuses LESS on commercial loans
What is the FDIC?
Insures deposits, both principal amounts and accrued interest, up to $250,000 per account for most accounts
Credit union…?
Not-for-profit institutions that accepts deposits and make loans
also Member / Owners all share some common bond, such as having the same employer, working for or attending the same school, living in same community ect.
Monetary Assets
include cash and other financial assets that can be converted easily into cash. This characteristic of being easily converted into cash is known as liquidity.
