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a process of setting goals, developing a plan to achieve them, and puttin the plan into action.
Financial Planning
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the very basic things that we MUST have to survive.
Needs
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the things that make life more interesting and fun, but you could live without them if you had to.
Wants
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the beliefs and practices in your life that are very important to you and can be influenced by your parents, friends, religion, and experiences.
Values
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something that you aim for that will point you in the direction you need to take.
Goal
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a goal that is for your life and what you want to do with it, for instance, going to college or taking the SATs.
Personal Goal
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a goal that involves money, how you're going to get it, how you are going to save, how much you are saving, what you are planning on using it for, ect.
Financial Goal
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goals that you want to acheive within the next three months.
Short-term Goals
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goals that are set for three months to a year.
Intermediate-term Goals
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goals that it will take you more than a year to achieve.
Long-term Goals
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with long-term goals, you have to be willing to give up something you want now to get something even better in the furture.
Delayed Gratification
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I want to go to Panama City for Spring Break
Specific
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I will need $150 for my share of the hotel room for the week.
Measurable
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I will split the driving with my friends and take $200 more for gas, food, and other spending.
Attainable
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I will save $60 a month from my paycheck for the next six months.
Realistic
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I want to save all the money by March 1st.
Time-bound
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SMART GOALS stands for...
specific, measurable, attainable, realistic, and time-bound
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measures the money you recieve and the money you spend.
Cash Flow
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Name the Six steps in making a decision.
indentify goal, establish criteria, examine options, weigh pros and cons, make decision, evaluate results
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when you cannot accomplish both goals and decide on one now and one later
opportunity cost
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when a major decision leads to smaller ones
satellite decisions
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name the five steps to financial planning
set smart gols, analyze information, create plan, implement plan, and monitor and modify plan
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a plan for managing your money during a given period of time.
spending plan or budget
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money you have coming in
income
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fee collected by a federal government to support its programs
federal income tax
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a fee that is collected to help pay for state services
state income tax
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a fee that provides a small income and other services to the elderly
social security tax
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fee that provides medical insurance to the elderly and other disabled Americans
Medicare tax
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the total amount of income from your wages or before any payrolll deductions
gross income
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know as you take home pay
net income
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what you spend money on
expenses
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what people usually do to meet short term goals
saving
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means you are setting your money aside for longer term goals
investing
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refers to the relationship amoung time, money, and rate of interest
time value of money
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rise in the cost of goods and services over time
inflation
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the idea of earning interest on interest
compounding or compound interest
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a share of the profits you recieve as a stockholder
dividends
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growth stock prices
capital gains
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savings account, savings bonds, cds, money market deposit accounts, money market mutual funds, corporate and government bonds
income investments
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stocks, real estate, collectibles, and mutual funds
growth investment
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reducing investment risk by putting money in several different types of investments
diversification
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investing a fixed amount in the same investment at regular intervals, regardless of what the market is doing.
dollar cost averaging
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