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33 Cards in this Set
- Front
- Back
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Receipts for ATM withdrawals and deposits and for cash or credit purchases thus need nly be saved until:
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you receive a statement verifying that your account was correctly charged.
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Bills for utilities, telephone, car expenses, and other irregular expenses that are not tax deductible should be kept for a _____ _______ so that you can accurately report the cost in your budget and personal cash flow statements.
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full year
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Any documents that support tax deductions should be filed with your ___ _______.
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tax records
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It's generally recommended that you keep tax records for ______ _______.
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seven years.
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Safe Deposit Box
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A secure private storage area maintained at a remote location, often a financial institution's place of business.
It keeps important personal documents secure. |
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Lockbox
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A fireproof safe that may be kept in the home.
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Important Personal Documents
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passports, birth and marriage certificates, social security cards, stock certificates, wills, and deeds
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Personal Financial Statement
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Reports that summarize personal financial information.
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Personal Balance Sheet
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A financial statement that details the value of what you own and what you owe to others to arrive at an estimate of your net worth at a given point in time.
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Net Worth
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The amount of wealth you would have left after paying all your outstanding debts.
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Assets
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Everything you own, including liquid assets, real and personal property, and investments.
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Debts
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Everything you owe to others, including unpaid bills, credit card balances, car loans, student loans, and mortgages.
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Liquid Assets
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Cash and near-cash assets that can be easily converted to cash without loss of value.
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Total Assets - Total Debt = ???
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Net Worth
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Examples of liquid assets
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Checking and saving accounts
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Examples of Assets
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Liquid assets, personal property, investments, real estate
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Examples of Debts
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Credit Card balances, car loan, student loan, mortgage
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Your most recent bank financial statements will give you the value of your _______ and _______ accounts.
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checking, savings
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The market value is/is not the same as what the asset cost when you bought it.
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IS NOT
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examples of real property
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home and other real estate
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Market Value
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The price that something can be sold for today.
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Cash Surrender Value
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The amount the insurer will pay to the policy owner if a cash-value insurance policy is canceled.
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An insurance policy is counted as an asset only if:
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it's a policy that accumulates cash value over time.
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If you cancel an insurance policy that has a cash surrender value, the insurer will:
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return that amount of money to you.
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Insolvency
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The inability to pay debts as they come due.
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Personal Cash Flow Statement
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A summary of income and expenditures over a period of time, such as a month or a year.
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When should cash flows be recorded?
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The cash flow statement is prepared on a "cash basis," which means that cash flows are recorded when they are received or paid.
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For the purpose of creating a personal cash flow statement, you should include as cash inflows all amounts of money you received during:
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the period of time in question.
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Cash inflows:
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wages, salaries, tips, commission, scholarships, cash allowances or gifts, proceeds from the sale of your assets, alimony or child support, government benefits such as welfare, unemployment, or social security, investment earnings (income from dividends and interest), and gambling winnings.
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Cash Inflows - Cash Outflows = ???
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Net Cash Flow
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Gross Income
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Income before taxes and expenses
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Fixed Expenses
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Expenses that are a constant dollar amount each period.
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Liquid Assets
--------------- = ??? Monthly Expenses |
Liquidity Ratio
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