Chapter 2 - Personal Financial Management

Loan

A large debt that is paid in smaller amounts over a period of time and has interest added to it.

Gross Income

Amount of money in a paycheck before paying taxes or other deductions.

Liability

An obligation to pay what you owe like a car loan.

A __________ is a detailed plan for a specific time period for specifying your financial goals.

Budget

A detailed credit history on an individual is called a _________________.

Credit Report

_________ is money you owe.

Debt

Credit Report

Detailed credit history on an individual; details balances and payments on current and past credit cards and loans.

Budget

Detailed financial plan used to allocate money for a specific time period.

Flexible Expenses

Expenses that change from month to month like food and utilities.

Fixed Expenses

Expenses that do not change from month to month, like a monthly mortgage or rent payment.

Automatic Deduction Plan

Funds are automatically deducted from your paycheck and placed into your savings account so you do not have the opportunity to spend the money.

Assets

Items worth money that you own like a house, car, and furniture.

The small expenditures that add up to larger amounts are referred to as _____________.

Money Wasters

Income

Money coming in that could come from parents, grants, student loans, and/or a job.

Expense

Money going out or money spent

Debt

Money owed.

Your ____________ is the amount of money that is yours after paying off debts.

Net Worth

_________________ is the process of controlling your income and your expenses.

Personal financial management

Personal Financial Management

Process of controlling personal income and expenses.

Money Wasters

Small expenditures that you may not realize are consuming a larger portion of your income that expected.

Net Worth

The amount of money that is yours after paying off debt.

Net Income

The amount of money you have after all taxes and deductions are paid.

Interest

The cost of borrowing money and is the extra money you pay a lender.

Fair Isaac Corporation (FICO) Score

The most common credit rating.

When considering applications for credit lenders, consider your _________________________.

character, capacity, collateral, and condition