Chapter 4

Question 1

costs that do not change each month

Answer 1

fixed expenses

Question 2

costs that can go up and down each month

Answer 2

variable expenses

Question 3

the act of donating money or time to a cause in which you believe

Answer 3

charitable giving

Question 4

the differences between planned amounts and actual amounts

Answer 4

variances

Question 5

information recorded in hard-copy format using pen and paper

Answer 5

manual records

Question 6

soft-copy formats of your financial information stored on your computer

Answer 6

electronic records

Question 7

a computer program that allows you to insert numbers and formulas to compute amounts and then easily change them later as needed

Answer 7

spreadsheet software

Question 8

the process of converting data to a coded form

Answer 8

encryption

Question 9

a set of personal and financial goals, along with steps and a timeline for reaching them

Answer 9

financial plan

Question 10

things you want to achieve in your life

Answer 10

personal goals

Question 11

plans for how you will pay for your personal goals

Answer 11

financial goals

Question 12

things you expect to achieve within one week to one year

Answer 12

short-term goals

Question 13

things you wish to achieve in the next two to five years

Answer 13

intermediate goals

Question 14

things needed for survival, such as food, water, clothing, shelter, and medical care

Answer 14

needs

Question 15

things people desire for reasons beyond survival and basic comfort

Answer 15

wants

Question 16

money or other items of value that are used to acquire goods and services

Answer 16

financial resources

Question 17

income from your job, investments, and other sources

Answer 17

cash inflows

Question 18

expenses, or items for which you must spend money

Answer 18

cash outflows

Question 19

money and items of value that you own

Answer 19

assets

Question 20

debts that you owe

Answer 20

liabilities

Question 21

the difference between your assets and liabilities

Answer 21

net worth

Question 22

giving up one option in exchange for another opportunity cost the value of your next best option-what you are giving up

Answer 22

trade-off

Question 23

a spending and saving plan based on expected income and expenses

Answer 23

budget

Question 24

things you want to achieve more than five years from now

Answer 24

long-term goals

Question 25

a visual display of how long it will take to achieve each phase of a plan

Answer 25

timeline

Question 26

standards against which progress is measured

Answer 26

benchmarks

Question 27

a professional consultant who provides financial advice

Answer 27

financial planner

Question 28

a common Internet scam that uses email messages to deceive you into disclosing personal information

Answer 28

phishing

Question 29

the use of your personal information by someone else without permission to commit fraud or other crimes

Answer 29

identity theft