Ch 1-3

Front 1

Describe what personal finance is.

Back 1

The decisions which an individual ora family unit is required to make to obtain, budget, save,and spend money over time.

Front 2

Outline the components of effective financial planning.

Back 2

Assess your financial situation, set money goals,write out a detailed plan for accomplishing your goals, and know your money.

Front 3

Identify focuses of study throughout this course.

Back 3

The history of finance.

Front 4

Understand the evolution of America’s dependence on credit.

Back 4

Credit has always been here since WWII allowed people with no money to purchase things.

Front 5

Observe and analyze the “normal” American family as it relates to personal finance.

Back 5

The "normal" American family is probably in debt.

Front 6

Develop communication strategies for managing money and discussing financial issues.

Back 6

You want to talk with each other not fight against each other.

Front 7

Evaluate your own money personality; identify your money strengths and weaknesses.

Back 7

I'm a saver not a spender.

Front 8

Identify the Five Foundations of personal finance.

Back 8

1) Save a $500 emergency fund

2) Get out of debt

3) Pay cash for your car

4) Pay cash for college

5) Build wealth and give it away

Front 9

Understand the purpose of having an emergency fund.

Back 9

It is ONLY for emergencies, not for spending.

Front 10

Explain the three basic reasons for saving money.

Back 10

Emergency fund

Purchases

Wealth building

Front 11

Understand the importance of saving for both long-term and short-term goals.

Back 11

Long term is for unexpected events, while for short term is for spending your pleasure.

Front 12

Describe what a sinking fund is and identify purchases for which you would use a sinking fund.

Back 12

Saving money over time for a large purchase like a car or for college.

Front 13

Demonstrate how compound interest works and understand the impact of annual interest rate.

Back 13

Add that to your original $1,000, andyou have $1,100.At the end of the next year, your $1,100is compounded at 10% interest, so yourreturn on investment is $110. Add thatto the $1,100, and you now have $1,210.Your interest on $1,210 is $121.

Front 14

Describe the difference between simple and compound interest.

Back 14

Simple interest is the interest credited daily, monthly,quarterly, semi-annually, or annually on principal only,not previously credited interest while compound interest is the interest paid on interest previouslyearned; credited daily, monthly, quarterly or semiannually.

Front 15

Understand the importance of beginning to save now.

Back 15

So you can build wealth early on.

Front 16

Understand the purpose of cash flow planning.

Back 16

To watch over your spending and to help you keep a budget.

Front 17

Identify reasons some people avoid having or stickingto a budget.

Back 17

They believethat having a budget will constrict them and keepthem from doing what they want to do.Somepeople are afraid to look at their finances closely.They’reconstantly hearing, “It’s not in the budget!”

Front 18

Identify changes in personal spending behavior thatcontribute to wealth building.

Back 18

It can help get rid of spending habits you had.

Front 19

Explain the difference between a cash flow statementand a budget.

Back 19

Cash flow statements is just a list of what you purchase while a budget is a way to control your spending.

Front 20

Develop a filing system for keeping financial records,both paper and electronic.

Back 20

Smart money managers.

Front 21

Describe record keeping features that financialinstitutions provide for online account management.

Back 21

It helps you keep a list of everything you do with your account and to keep it organized.

Front 22

Describe how to use different payment methods andbanking features.

Back 22

Online bill paying

Writing checks

Debit card purchases

Account transfers

Front 23

Define zero-based budget.

Back 23

A cash flow plan that assigns anexpense to every dollar of your income, wherein the totalincome minus the total expenses equals zero

Front 24

Develop a plan for spending and saving that has bothlong-term and short-term components.

Back 24

Long term saving s are just for emergencies and colleges while short term is for consumer purchases.

Front 25

Analyze how changes in circumstances can affect apersonal budget.

Back 25

Change is circumstances like not having enough money can change your personal budget because it forces you to spend less on useless things and focus on getting enough to pay the important things.