Chapter 2

Question 1

Time between birth and death

Answer 1

Life span

Question 2

Money that remains after a person has paid all of his or her expenses

Answer 2

Discretionary income

Question 3

Difference between what is owned and what is owed

Answer 3

Net worth

Question 4

Plan for the use of money over time based on goals, expenses, and expected income

Answer 4

Budget

Question 5

Set amount that must be paid each budget period

Answer 5

Fixed expense

Question 6

Development of a strategy to meet a person’s financial needs over the course of his or her lifetime

Answer 6

Nature of financial planning

Question 7

Process of setting up an organized system for important documents

Answer 7

Record keeping

Question 8

Abundance of money and other assets

Answer 8

Wealth

Question 9

Cost that changed both in the amount and time it must be paid

Answer 9

Variable expense

Question 10

Item of value that is owned

Answer 10

Asset

Question 11

Software program that formats data in columns and rows and can perform calculations

Answer 11

Spreadsheet

Question 12

Amount spent for an item that a person could do without

Answer 12

Discretionary expense

Question 13

Summary of the amount of money received and the amount paid for goods and services during a specific period

Answer 13

Cash flow statement

Question 14

Computer program used to organize daily finances and keep track of income, spending, savings, debts, investments, and other financial data

Answer 14

Money management software

Question 15

Any form of money received, such as an allowance, a paycheck, gifts, and gains from an investment

Answer 15

Income

Question 16

Organization that aids those in need

Answer 16

Charity

Question 17

Cost of goods and services purchased. Also, cost involved in operating a business

Answer 17

Expense

Question 18

Personal financial strategy that can help a person save money by paying himself or herself first and putting money aside for saving

Answer 18

Pay yourself first

Question 19

Process of studying data with the goal of discovering bee information that can help with making decisions

Answer 19

Data analysis

Question 20

Current or future financial obligations, such as unpaid bills, credit card, charges, mortgages, personal loans, and taxes. Also, legal responsibility

Answer 20

Liability

Question 21

Amount of money that can easily be accessed in case of a job layoff, illness, or unexpected expense

Answer 21

Emergency fund

Question 22

Paper that can be filed with a court officer or used to uphold an agreement in a court of law

Answer 22

Legal document

Question 23

Ease with which an asset can be converted into cash without losing value

Answer 23

Liquidity

Question 24

Major problem that changes a person or family’s lifestyle and future

Answer 24

Personally financial crisis

Question 25

Behaving with sensitivity to social, environmental and economic issues

Answer 25

Social responsibility

Question 26

Written record of an individual’s current financial situation

Answer 26

Net worth statement