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28 Cards in this Set
- Front
- Back
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Financial Planning
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managing income and wealth continuously through life to meet financial goals
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Values
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fundamental beliefs that define your financial success
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Financial Goals
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specific objectives to be attained through financial planing and management efforts
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Financial Strategies
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guide your financial success
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Financial Statements
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measure your financial heath and progress
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Balance Sheet
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measure your net worth
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Components of a Balance Sheet?
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Assets - Liabilities = Net Worth
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Assets
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what is owned
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Monetary Assets
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liquid assets or cash equivalents
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Liabilities
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what is owed
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Cash Flow Statement
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tracks where your money came from and went (Income - Expenses)
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Fixed Expenses
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stay much the same from month to month
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Variable Expenses
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change from month to month
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Basic Liquidity Ratio
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number of months you could meet expenses using only monetary assets if all income is ceased
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Liquidity
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the speed and ease with which an asset can be converted into cash
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Asset to Debt Ratio
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compares total assets with total liabilities
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Debt to Service Income Ratio
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compares total dollars spent on gross annual debt
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Debt Payments to Disposable Income Ratio
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divides monthly disposable personal income into monthly debt repayments
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Disposable Income
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income after subtracting withholdings for taxes and insurance
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Investment Assets to Total Assets Ratio
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compares investment asset value with total assets
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Financial Records
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documents that evidence financial transactions
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Budget
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a paper or electronic document used to record both planned and actual income and expenditures over a period of time
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Past Present Future of Financial Statements
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Cash Flow Statement (PAST)
Balance Sheet (PRESENT) Budget (FUTURE) |
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Take Home Pay
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pay received after employer withholdings from taxes, insurance and union dues
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Cash Flow Calendar
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budgets estimates for monthly income and expenses
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Revolving Savings Fund
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variable budgeting tool that places funds in savings to cover emergency or higher than usual expenses
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Budget Variance
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difference between amount budgeted and actual amount spent or received
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Record Keeping
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recording sources and amounts of dollars earned and spent
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