personal finance credit/ budgeting
two examples of institutions that are sources of credit are?
bank and credit union
a household cashflow worksheet is a useful tool when building a...?
budget
what do lenders look for when they approve a loan to an individual?
character capacity collateral
what are 2 ways to avoid financial debt?
1) budget 2) don't spend all your money
what are the three types of expenses?
1) discretionary 2) fixed 3) variable
list the 6 steps to creating a budget
1) establish financial goals 2) estimate and total your income 3) estimate and total your expenses 4) analyze current income and spending 5) prepare a budget 6) evaluate your budget
what are some advantages of using credit?
1) help acquire assets 2) buy now- pay later 3) emergencies
what are some disadvantages of using credit?
1) use too much- make too little 2) bad credit
experts recommend saving at least what percent of your income?
10%
to reduce spending you should study your expenses. what expenses should you look at first?
discretionary expenses
two reasons to use credit are?
emergencies and buy now pay later
if you spend more than you earn, what should you try to increase?
income
what is capacity?
income to comfortably make payments
if the net amount in your monthly budget is negative, you may be...?
living beyond your means
what is an unsecured loan?
loans that are not backed up by other assets
what is interest?
money the bank pays you for leaving it in your savings account
by honestly evaluating your _____ versus _____, you can control excessive spending
needs/wants
a liability has a ________ economic value
negative
assets minus liabilities determine a persons...?
net worth
what is credit?
obtaining the use of money you do not have
what are some things you can do if you have a negative net worth?
pay off your debt or don't spend as much money
the main purpose of a budget is to?
slow down spending
what is philanthropy?
the act of giving money, goods or services to meet the needs of others and to support organizations and causes that are important to you
what is an expense?
the cost of goods and services that you buy
what does it mean to have a positive or negative net worth?
the difference between what you own and what you owe
if you do not have a full time job what are other ways to help out a charity?
time and talents
what is character?
will the applicant pay back the loan?
groceries are an example of?
a variable expense
what is a net worth statement?
a written record of an individuals current financial situation
discretionary spending does not pay for...?
fixed and variable expenses
what is collateral?
guaranteed based on an item that can be used to repay debt
a diamond necklace is an example of?
an asset
what does a charity refer to?
an organization that aids those in need
what is income?
any form of money received
