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37 Cards in this Set
- Front
- Back
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what "life stages have the most discretionary funds? |
empty nest and bachelor/ bachelorette |
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what has to be restrained to meet financial objectives |
debt |
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a balance sheet includes what 3 parts? |
assets liabilities networth |
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what does a cash flow statement include |
cash and cash equivilent |
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what is the formula for calculating net worth? |
assets-liabilities= networth |
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what are assets? |
the current value of ones items |
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what are the different types of assets |
savings account, stocks and bonds, real estate, car, home, jewlery |
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what are liabilities? |
debt or money owed |
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what are some examples of liabilities? |
mortgage, auto loan, student loan, overdue bills, credit card balance. |
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what is disposable income? |
the amount of money one takes home |
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what s discretionary income? |
what is left after budgeted expenses |
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what is a liquid asset |
cash on hand or an asset that can be redily converted into cash |
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what is a fixed expense? |
something that does not change regardless of change in amount produced. |
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what are some examples of a fixed expense? |
rent, car payment, loan debt. |
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what are variable expenses |
costs that change depending on your use of goods or services |
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what are some examples of variable expenses? |
groceries, clothes, and other goods |
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what are the 3 most useful financial statements? |
1, balance sheet 2, income statement 3, cash flow statement |
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what is a budget surplus |
when your income is greater than your spending |
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what is a deficit? |
when your spending is greater than your income |
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what is equity? |
the difference between the value of assets and the cost of liability |
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what is te principle when it comes to incurring debt? |
"only incur debt if you know that the asset will gain value over time to limit length and amount borrowed" |
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how do you increase your net worth |
pay down your debt cut back on spending |
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personal income taxes are paid on what |
your taxable income |
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what are progressive taxes? |
tax increases as payer income increases |
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what are regressive taxes? |
tax rate increases as payer income decreases |
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what is AGI |
adjusted gross income |
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what are itemized deductions |
elidgible expenses that tax payers conclaim to decrease their taxable income |
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what is an itemized deduction? |
allows you to list you deductions |
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what is a standard deduction? |
the fixed dollar amount based on status and age |
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can you use both the itemized deductions and standard? |
nah |
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which should you use when filing taxes... itemized or standard? |
itemized |
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what is tax credit? |
an amount subtracted from what you owe |
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what is tax avoidance? |
the arrangement of ones affairs to maximize tax liability with in the law |
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what is tax evasion? |
not reporting all income this is illegal |
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what is the penalty for tax evasion? |
up to 5 years in prison |
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what is a 1040EZ tax form? |
it is for married coupls without kids, or if income is less than $100,000 |
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what is a 1040 tax form? |
it is the most complex used if self employed or have internatinoal funds. |
