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28 Cards in this Set

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