Chapter 1: Planning in Action Flashcards
personal financial planning
managing money to achieve economic satisfaction
financial literacy
knowledge of earning, saving, spending, and investing to achieve goals
financial plan
formal report summarizing financial situation by analyzing needs
adult life cycle
stages in the family situation and financial needs of an adult
values
ideas/principles that someone believes are correct
economics
study of how wealth is created/distributed
economic environment includes
business, labor, and gov’t working to satisfy needs
federal reserve system does?
to encourage? (3)
maintains adequate money consumerism, business growth, and job creation
inflation vs. deflation
rise in prices
decrease in prices
consumer price index is made by?
does?
bureau of Labor Statistics
measures avg. change in prices consumers pay for things
rule of 72 is used for?
what is it?
to find out speed of prices or when savings double
divide 72 by annual inflation or interest rate
interest rates represent?
influenced by?
cost of money
supply and demand
short term goals
intermediate
long term
acheived within the next year or so
time frame of 2-5 yrs.
take longer than 5+ yrs.
consumable product goals
involve items used quickly
durable product goals
involve infrequently purchased expensive items
